Buying property for a child attending university in the UK can involve HMO rules, rental income tax, mortgage considerations and compliance obligations. This guide explains how the structure works and what to consider once your child graduates.
Many overseas parents consider buying property in the UK when their child is studying at university. The idea appears straightforward: instead of paying rent to a landlord, purchase a property, allow your child to live there and potentially rent spare rooms to other students.
In practice, this arrangement involves legal, tax and regulatory considerations that differ from a standard residential purchase.
Before proceeding, it is important to understand how the structure works and what obligations arise.
The information in this article is general in nature and should not be relied upon as legal or tax advice. Student lettings, HMO regulations and cross-border tax obligations can be complex. Independent professional advice should be obtained before committing to a purchase.
Yes. There are no restrictions preventing a foreign national from buying property in the UK for their child to occupy.
However, the legal and financial structure depends on how the property will be used:
These questions determine whether the property is treated as a standard residential home or as an investment property.
If your child lives in the property and additional rooms are rented to other students, the arrangement may fall within the scope of Houses in Multiple Occupation (HMO) legislation.
An HMO is generally defined as a property occupied by multiple people who are not part of the same household and who share facilities such as kitchens or bathrooms.
The property may require you to obtain a license, although this will depend on the following factors:
Licensing requirements vary by council. Some areas operate mandatory licensing for larger HMOs, while others impose additional licensing schemes covering smaller properties.
Failure to obtain a required licence can result in penalties.
Even where a licence is not required, safety regulations apply. These may include:
Compliance is always the responsibility of the owner.
If the property is purchased with a mortgage and rooms are rented to other students, the lender must be informed.
A standard residential mortgage may prohibit letting to unrelated occupants. Buy-to-let mortgages or specialist products may be required depending on the structure.
Some lenders view student occupancy differently from standard tenancy arrangements, particularly if the property is considered an HMO.
Using the wrong mortgage structure can breach lender conditions.
If you receive rent from other students, that rent is taxable in the UK.
Even if your child occupies one of the rooms without paying rent, rental income from other occupants must be declared to HMRC.
Allowable deductions may include:
Non-resident owners must register under the Non-Resident Landlord Scheme if the property generates rental income.
In addition, rental income may need to be reported in your country of residence.
Capital Gains Tax may apply when the property is sold. Unlike a primary residence owned and occupied by the owner, a property owned by a parent and occupied by a child does not automatically qualify for private residence relief.
Inheritance tax exposure should also be considered, particularly if the property is held long-term.
Full-time students are generally exempt from Council Tax. However, this exemption applies only if all occupants are full-time students.
If one or more occupants are not students, Council Tax liability may arise.
The owner should confirm local authority treatment and ensure correct registration.
Standard owner-occupier insurance is unlikely to be appropriate where rooms are rented to unrelated students.
Landlord insurance may be required. This typically covers:
Failure to disclose occupancy arrangements to insurers can invalidate cover.
Owning a student property involves management responsibilities. Even if your child lives in the property, the owner remains legally responsible for compliance and maintenance.
This includes:
If you live overseas, appointing a managing agent may reduce administrative burden but will reduce net return.
It is also important to consider personal dynamics. Your child may not wish to act as de facto landlord to their peers. Clear boundaries and formal tenancy agreements reduce the risk of conflict.
One of the most overlooked questions is what happens when your child leaves university.
At that stage, the property becomes a pure investment. You may:
Each option has financial and tax implications.
The local rental market must be capable of supporting ongoing demand beyond your child’s occupancy.
Exit strategy should be considered at purchase, not at graduation.
Whether buying a property for your child at university makes financial sense depends on:
In some cases, long-term ownership in a strong university city may align with a broader investment strategy.
In other cases, the transaction costs of buying and selling within a short study period may outweigh rental savings.
The decision should be modelled across the full lifecycle of ownership rather than compared only to annual rent.
Buying a property for your child at university can appear straightforward, but once additional students occupy the property, regulatory, tax and mortgage considerations arise.
If you would like to review whether the structure makes sense for your circumstances request a free 30-minute consultation with an independent UK property and finance specialist.
