Should I buy a house whilst being a student?

[Scarlett]

I am thinking of going to uni and was wondering whether it would make financial sense to buy a house to live in (renting out the other 2 rooms to other mature students or workers) for 3 years, or to just rent a room in someone else's house for 3 years. Would anyone lend money to a student? Would it have to be buy to let? I have some inheritance which I can use as a deposit etc.

[Hymie]

Let’s suppose once you have paid the deposit, that the outstanding mortgage is £100k – from where are you going to get the £600 a month mortgage repayments (as a student)?

It is unlikely that those renting rooms would be willing to pay £300/month each – in a house costing not much more than £100k.

Remember that should you want to rent out rooms, you will need permission from your mortgage provider and there will be increased insurance costs as a result.

[Scarlett]

Well, each person would pay the going rate of £370 plus bills. This is the standard rate for this particular area. If the mortgage was interest only (at least initially) then that would easily cover the outgoings. I know it seems a risk, but if you had 3 or 4 people renting rooms, surely it would get paid?

[factor-fiction]

Would a mortgage lender lend you over £100000 if you had no regular subsantial income? Good luck if they will.

[Hymie]

I would recommend you seek the advice of a mortgage broker – but as others have indicated, I don’t think much of your chances.

Effectively you are looking at a buy to let mortgage (although you will be living in the property).
5 years ago, mortgage providers would have been falling over themselves to accommodate you – believing that they were on to a winner, with the ever increasing property prices. Now that reality has set in, since there is no guarantee that the property will increase in value – they will be very unlikely to offer an interest only mortgage (with the ever present risk that you will walk away, leaving them with the debt).

Another major concern for any lender would be your ability to pay the mortgage should you not be able to find tenants for an extended period. As a student with no income, it is hard to see how you would begin to meet your mortgage obligations without tenants – but if you could show that you could cope for say 6 months, you might find someone willing to assist.

[Scarlett]

Yes I see your points! The 4th person by the way, would sleep in the sitting room. That's the way they do it in student houses- squash them all in and make as much money as poss. I looked at a 6 bed house which was an ex-council house and originally 3 bedrooms. They took down a few walls and rebuilt it to accomodate 6 very squashed students.

[Old_Geezer]

You might be better off getting your parents to get the mortgage and you paid them.
As for whether it's a good idea, any large purchase is a gamble, Go for it, or don't.

[society]

"I have never heard about someone sleeping in the lounge lol "

in dire situations one might be willing to sleep almost anywhere. nothing wrong with sleeping in the lounge, providing there's heat.

[S_C]

you would finfd it hard to gain a morgage while still a student with little or no income .

any room you rent out with a rent above a modest £50+ a week would require you pay tax on this income.

remebering your thinking that people will pay inexcess of £300 a week to live here , you would have to pay a lot of tax as much as 40% with regards to income.
this would obviously cut into any income you gain and make things harder , however anyone paying such high rents would i expect to have bills paid within the rent.

remember buying a house is a long term commitment and without a regular income this is going to be extremely hard to do , remember people can move out as well as in and any shortfall would have to be found.

currently the property market is struggling due to debt and unemployement , and property prices can go down as well as up.
buying a house and renting rooms is allowed in some morgages however a buy to let morgage would not be needed unless you do not live in the property itself.

you need to rmember insurance will be required and will be much higher where rooms are let out. another expense you will have to cover.

all those money worries while studying , i would think you maybe want to avoid this idea but it is obviously your choice.

[Scarlett]

I think you're right! I will just be a renter.....