Parents are increasingly buying properties near universities to house their children as the cost of renting outpaces mortgage repayments in many parts of the UK.

Analysis by broker Alexander Hall compared average mortgage costs with rental prices across postcodes covering the top 100 universities.

The findings suggest that, in some cities, families can save hundreds of pounds a month by purchasing rather than renting, while also securing a long-term investment.

The University of Sunderland ranked as the most affordable location for buyers. The average property price in the SR1 postcode is £59,454, equating to monthly mortgage repayments of about £275 on a 25-year term at an average rate of 4.21% – far below typical rental costs. Teesside University (£361 per month) and the University of Aberdeen (£435) also offer some of the lowest mortgage outlays.

BIG SAVINGS

The biggest savings compared with renting are in Glasgow. At Glasgow Caledonian University, the average mortgage repayment in the G4 postcode is £806 per month – £535 less than the average rent of £1,341. Nearby, the University of Strathclyde also offers large savings, with monthly mortgage costs in its G1 postcode coming in £502 cheaper than renting.

Other locations showing significant mortgage-to-rent gaps include the University of Leeds (-£488), Newcastle and Northumbria (-£484), Sunderland (-£397), the University of South Wales (-£396), Cardiff (-£371), Nottingham Trent (-£356) and the University of Nottingham (-£355).

With student rents continuing to rise, the trend highlights how university towns and cities are increasingly being seen by parents not only as a means of easing financial pressures on their children but also as an entry point into the property investment market.

FIRST STEPS

Stephanie Daley, spokesperson for Alexander Hall, said: “Securing a place at university is something to be celebrated, and this September hundreds of thousands of first-time students will leave home to take that first step into the wider world.

“Not only is it an understandably daunting experience living away from home for the first time, but it’s also one that comes with a significant financial burden due to the high cost of living and renting.

“It’s for this reason that we’ve seen a growing trend of parents opting to help alleviate this strain by investing in a property for their child, and for many, this parental support is essential.”

REGULATED BUY-TO-LET

And she adds: “There are many ways parents can support adult children onto the ladder, for example through joint borrower, sole proprietor options or regulated buy to let which allow family members to live in the property or specific ‘buy for university’ products which don’t even require a deposit.

“This allows students to access housing without overstretching on rent, benefit from the lower cost of a mortgage repayment, and start building equity in a property. It’s a practical way for students to get ahead while studying and helps them take their first steps on the property ladder before they’ve even graduated.”