Student homes are good for business

Students are nice little earners, say property experts. Although parents usually expect to lose a small fortune when their children go to university, many have been doing rather nicely out of these years of study.

Students are nice little earners, say property experts. Although parents usually expect to lose a small fortune when their children go to university, many have been doing rather nicely out of these years of study.

However, those buying property in the North and North-East seem not to be faring quite as well as their southern counterparts.

Research from Landlord Mortgages, a leading buy-to-let broker, say that parents of children just completing three year degree courses made a profit of almost £32,000 - if parents bought a place in Edinburgh back in 2004.

That figure includes a capital gain of £28,939, as Edinburgh's average property price now tops £311,000, plus £2,688 saved on rental payments.

However there were much smaller rises for parents in Nottingham, Manchester and Durham, which took the lowest place in the league table with a profit of £6,465.

Other big risers over three years were Central London (profit £29,346); St Andrews, with its Royal connections through Prince William and former girlfriend Kate Middleton, (£22,990) and Bath (£19,935).

Lee Grandin, Landlord Mortgages managing director, said: "With stiff competition for rented accommodation in university towns, investors have a captive audience, so this type of buy-to-let can be highly profitable."

But the bumper figures reflect buoyant years in the housing market - with no guarantee of a repeat between now and 2010.

With centres like Bath indicating an average property price of more than £200,000, parents must be sure that they can service a large mortgage until children have completed their studies.

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