The rise of the ‘parent landlords’
Nearly three quarters of parents (730,000) are renting out second homes to their children as rocketing property prices keep youngsters off the property ladder.
Only five per cent of mum and dad landlords charge the market rate, while 12 per cent even pay the bills, and a massive 30 per cent let their kids pay what they can afford.
A report from Post Office Money Mortgages has tracked the reasons behind the trend: 26 per cent of ‘landlord parents’ say they want to provide a helping hand, while 24 per cent do it to help their offspring to save money, 27 per cent say they want their children to be in a safe property and 24 per cent want to keep them near the family nest.
Not all of their reasons motives are entirely altruistic, as 25 per cent buy a second home as an investment, while 21 per cent want their children to move out of the family home.
John Willcock, at Post Office Money Mortgages, said rising house prices, which mean home ownership is a ‘distant dream for a significant number of today’s younger generations’, is ‘a challenge which affects the whole family.’
Research suggests that more and more parents are considering BTL as a way to support their children and to secure their own financial future, he said.
“This not only provides their children with the opportunity to save for the future, but can act as an investment which can help with their own long-term financial planning,” Mr Willcock added.
Despite the advantages, the report highlights potential problems, with 30 per cent of those surveyed concerned with arguments over rent and 24 per cent worried how well the property will be cared for by their children and 19 per cent anxious about parties being hosted.