Say goodbye to the student dive

As thousands of students search for decent term-time accomodation, Christopher Browne meets two families who bought their own

If you're a student with your own pad, you'll attract the same kind of admiration and envy that all those hi-fi Henrys and laptop Lavinias used to get at colleges a few years ago. It's now thoroughly fashionable for parents to buy a home for their undergraduate offspring to live in while they are studying instead of three years of digs or a rented home.

In some university towns, five per cent of students live in a flat bought by Mum or Dad. And the figure continues to grow, as more parents see the merits of giving their offspring a secure base, as well as a handy investment for themselves. Manchester, for instance, which has four universities and colleges, is popular with the parent purchaser, with properties that combine competitive prices with capital growth.

The idea appealed to Macclesfield doctors Chris and Mary Lockram, who bought a four-bedroom semi for their daughter Catriona at the start of her medical studies at the University of Manchester. Now 22, Catriona shares the south Manchester house with three other students. "It means she can live in relative comfort, while we don't have to find the extra money to pay for rented digs," says Chris Lockram.

Although the house is managed by a lettings agency, Catriona likes to choose the tenants herself. "All the sharers have been old friends and there have been a few teething problems, but it's much better to share - and easier to sort out difficulties - with young people you know than with strangers," says Chris Lockram.

In her first year, Catriona shared the house with four others. "But it proved one too many. It was over-crowded, difficult to look after and the girls used to get on each other's nerves. So in the second year we reduced the number to three and things have been far more harmonious," says Chris Lockram.

The Lockrams have fitted the house out with a new kitchen, bathroom and central heating. And when Catriona leaves university, it will switch to a new role as an investment property. "We'll almost certainly hold on to the house, and instead of selling, rent it out as a buy-to-let - though I don't know whether it'll be to students," he adds.

A few months ago, Dave and Anne Ovens from Waleybridge in Derbyshire bought a two-bed duplex for their son George, a music technology student at Manchester City College. "After looking at several slightly rundown city flats with rents of £75 to £85 a week, we decided to buy to save money and give our son some independence," says Dave Ovens. The couple bought him a one-year-old city-centre duplex. "He spent his first two years at college at his grandmother's house. And though having his own place was a bit of a culture shock at first, George has really taken to the idea."

George shares the apartment with another male student, and their rents cover the monthly mortgage payments. As an independent financial adviser, Dave Ovens understands the benefits of parent-owned properties. "It's a common-sense thing to do if you can afford it, whether it's for a three- or five-year period of study, and in a rising market I would advise parents to buy in areas where their homes will increase in value and can be used for future investment."

Parents who buy get perks, too - just like the average card-holding student. An inland revenue campaign to improve inner cities means that anyone who buys in designated low-growth areas near colleges and universities won't have to pay stamp duty. Developers like Wimpey have also introduced their own "duty-free" zones to attract new buyers. Then there are the post-degree perks. If you put your flat or house in your son's or daughter's name while they are at college you won't have to pay capital gains tax should you sell after three years or at the end of their course.

Another money-saver is to gift your property to your offspring, which means that after seven years (providing you, too, survive that period) they won't have to pay 40 per cent inheritance tax on it. The Lockrams, however, added their daughter's name to the title deeds. "It'll make it easier if in the future we decide to pass the house on to Catriona as an investment and need to transfer it into her name," says Chris Lockram.

Of course, you either need capital or relatively high earnings to buy a pad for your son or daughter. But there are other ways to enter the student comfort zone. A specialist agency called Unite, which owns a huge portfolio of university-linked halls of residence and this year placed 21,000 students in luxury apartments, can be contacted on 0845 111 0021 or www.unite-students.co.uk. Or you could approach the institution direct and see if they are running any private accommodation schemes.