Buying a flat for student children

[NellNorth]

Our eldest is in halls this year in Edinburgh, and we have 3 younger siblings coming up after him- we'll have children at uni for at least the next 8 years. They may not all go to Edinburgh, but at the moment it's the target destination of at least 2 of them.
We can afford to put down a 40% deposit, and get a guarantor mortgage in our eldest's name.
We would see it as a family asset, but it would obviously be solely in our son's name. We'd hope to be able to use the equity as deposits for all 4 children in the future.
I'm interested to know how other people have dealt with this, as I've no doubt it can be complicated. I know of one family where the flat became a home for one of the children ( and her partner)and the parents then never sold it. The other siblings felt they got an unfair advantage, which was true.
What sort of pitfalls should we be aware of, if any?

Not fair on your eldest DS he will not be able to use the tools available to him to buy his first home in the future as he won’t be a first time buyer. Purchase the property in your name with a BTL.

I think the fact that there’s no guarantee that the rest of the siblings will go to Edinburgh is the biggest one. It’s likely to be a real sore point if you’ve given one a big leg up like that and can’t afford to do it for the rest. Even if they do go, what if DC1 doesn’t want / can’t afford to move out when it’s DC2’s “turn” to live there? What if they have completely incompatible lifestyles? Why would DC1 want to be on a mortgage for somewhere they can’t live?

You might see it as a “family asset” but it only takes a falling out between you and the DC for it to become very clear that it’s not the case.

If you’re going to do this, buy it and mortgage it in your name and then each DC can live there as they need to, with it being let on the private market when there’s no DC to live there.

Why would it obviously be solely in your son's name?Would he then be the landlord for your other children or would he gift the house to each of them in turn? It sounds very messy.

My friend's parents just bought a house and she got to live there rent free instead of them paying her rent to a landlord. That's all it needs to be an student level. Any talk of deposits can come later.

We considered this (also in Edinburgh) but DD was keen to live with friends and we were wary of the landlord relationship potentially getting in the way of the normal ups and downs of flat sharing. We ended up buying her a flat in London when she graduated instead, she is an only child though.

I think it is a bad idea.

Your kids need to be free to make their choices, you end up messing up their friendships as they are the landlord not an equal flatmate, they don't get to escape your control.

Also unwise. to buy one flat in one city when you've so many children who could go anywhere.

I wouldn't do this.

How can I stop my diamond shoes from chafing?

You ask about poss pitfalls. My sister bought a flat for use by her DD as she was finding it hard to find somewhere decent to rent with decent flatmates. She was doing medicine so they had many years use, but the flat sold for less than they bought it for so don't rely on building up equity at the end.

I think your DS is likely to want to live with mates in subsequent years, and mates are unlikely to want a friend's parents as landlords in their student gaff.
I don't think you want to be a student LL.
I think it is removing benefits from your DS in terms of what he might get as a first time home buyer when he is in a position to buy his first home - you need to own the property and take the tax hits if relevant.
I think it is putting unfair pressure on your other kids to all go to the same uni (weird). I don't know that all your children will want to live together even if they do all end up at the same uni.

We've just sold ours (in Edinburgh). We kept it in our name on our solicitors advice and had tenancy agreements with DDs friends who lived with her. We used the standard forms available on the Scotgov site. We did the annual gas/electricity/fire checks every summer and apart from that didn't need to worry about much at all.

It was all really simple and financially a good decision given how expensive rents are in Edinburgh. We did think about keeping hold of it now DD doesn't need it, but the council tax alone (double for second properties compared to zero for students) would have been prohibitive.

When I was at uni, 30 years ago, my best friend's parents bought a small two-bed flat for her, I was invited to stay, and it was wonderful - better than the student houses elsewhere, and there was no imbalance of her being the daughter of the landlord - they even insisted I had the larger room (for more rent, obviously, but it wasn't much bigger, and rent was good value). It was a very good deal for us all - they charged me the going rate for the house we were in, but I got much nicer accommodation in a better area.
If you treat the other tenants extra well, I think it could work nicely. Don't put it in his name though, for reasons explained by PPs.

She had one sibling, I don't know what they did for the sister when she went to uni elsewhere, but I think she ended up in nicer accommodation, whereas my friend and I were in a horrible house, which was the main driver for her parents wanting to buy something.

I get why you want to do it - we thought of doing the same, but I also think it takes something away from them in terms of independence and flat hunting with their friendship group. It's a gift with massive strings attached and a little controlling. It also doesn't save a huge amount of money, as private student accommodation (where my dd is studying) includes all bills, wifi etc.
We opted to give them their deposits when they leave uni instead.