Students are being offered 100 per cent mortgages if a close family member puts up their savings or home as security.
Loughborough building society has launched a ‘Buy for Uni’ mortgage allowing students over 18 to purchase a home with the help of a parent, step-parent or grandparent.
The buyer must let out spare rooms to students and use the rent to pay the mortgage, in effect becoming a landlord. As security, a close family member must deposit 20 per cent of the value of the house into a savings account or allow Loughborough to put a charge on their own property. The building society will lend up to 100 per cent of the property value to a maximum of £300,000, depending on income expected from the rent. The home must have no more than four bedrooms and be within ten miles of the university the buyer is attending.