Loughborough is offering mortgages of up to 100 per cent loan-to-value for students to rent out as buy-to-let landlords.
The building society’s new Buy for Uni product range is being offered to youngsters aged 18 plus in higher education, who can then rent spare rooms in the house to friends or fellow students and use the income generated to cover the mortgage payments.
The deal is being offered to students whose parents or grandparents are willing to use their savings or property as security.to cover 20 per cent of the value of the house.
Deals start at a rate of 4.54 per cent for a three-year discount off the lender’s standard variable rate, which is currently 4.84 per cent, and the maximum property price available is £300,000.
The product range is similar to that offered by Bath Building Society, which was launched nine years ago.
Mark Loydall, director at Loughborough-based Cambourne Financial Planning, said: “Loughborough is a massive university town and there is a lot of buy-to-let property here, and they have clearly looked into the market and decided to tap into it.
“An entrepreneurial student could get a room and get his mates to pay for it. That sounds like a pretty good idea to me. It is a strong market in this area, so they are not going out on a limb.”
simon.allin@ft.com
