Lyndsey-Anne Borrowman, 26, a trainee teacher, bought her one-bedroom flat in Gorgie, Edinburgh, in 2006, thanks to the help of her parents. Her father is a property expert at a legal firm, and Borrowman says she could never have got on the property ladder without their help. Now, having used the flat for three years, she is selling up before she gets married.

“I’ve really enjoyed the security of my own place and I am also now benefiting from lower mortgage payments,” she says. “It is an easy equation to balance if you can afford to buy — in my case, £500 rent per month or a £300 mortgage. I haven’t seen much capital growth in the past two years but I’ll still walk away with a profit to reinvest once my parents have got their money back.”

Buying a flat for the duration of a degree course isn’t quite as straight-forward or attractive as it seemed in the boom years of the past decade, but it can still stack up for lots of parents.

“There is a lot to be said for the positives of home ownership at a young age in terms of instilling positive life lessons,” says Mark Hordern of the GSPC. “Three years of mortgage payments and any accrued profits can also be a springboard onto the housing market proper.”

However, if you are planning to buy a property for your child with the intention of renting rooms out to other unrelated parties, it must be at least partially owned by the child — and it cannot be let to more than two other tenants without a House in Multiple Occupation (HMO) licence from the local authority.

It is essential parents investigate HMO rules at the outset of property purchase as laws differ regionally and can be complex and costly. Fire doors, insulated cupboards and floor-plan alterations could stretch to £10,000-plus before you can rent out spare rooms.

That said, in areas where the monthly yield on rental properties is 6% it can be as much as 12% for student flats. The HMO legislation has helped weed out dodgy landlords and eyesore student flats. Standards — and tenants’ expectations — are up, and while that means a higher fitting-out bill for landlords, their efforts are offset by rents in most cities of at least £350 a month per room.

With average five year fixed mortgage rates around 5%, and interest rates likely to rise in the medium term, a student purchase is safest where the parents take the view that their purchase is a helping hand to their child, rather than a potential cash cow. However, as with most things, the picture looks rosier for the already well-heeled.

According to Maurice Allan of Strutt & Parker, where a potential buyer has £500,000 savings the cash might attract a 2-3% interest rate if left in a bank. An alternative is putting £300,000 down on a £500,000 property and borrowing a mortgage of £200,000. Paying an interest-only mortgage might cost up to £12,000 a year, but if the money from the rent is £18,000, the yield is much better than leaving it in the bank.

Buyers should be aiming for a yield of at least 6%, says Allan. And obviously there’s the capital growth of the property when buyers come to sell maybe four or five years down the line.

By its nature, student property is often a long way from the parental home, and putting your child in the position of having to deal with the day-to-day running of a property, as well as acting as rent collector, isn’t to be entered into lightly. Should you choose not to use a reputable letting agency, there are legalities to consider.

You should insist on a watertight tenancy agreement in case the flatmates fall out and move on owing rent. If parents retain ownership of the property, all tenants — including offspring — must sign a short assured tenancy agreement. Without this, you may have to pay compensation to persuade reluctant tenants to move out if you want to sell.

It is also a good idea to include a clause on the lease that each of the tenants is jointly and severally responsible — that means if one party defaults on rent, the others are liable.

Whether or not an HMO licence is required, parents, offspring and landlords need to be aware of the plethora of safety regulations. These include electrical appliance and wiring tests, installing smoke detectors and getting energy performance certificates. Student landlords must be reconciled in advance to their role — they’ll be the ones finding an emergency plumber when the boiler packs in. Also, all landlords in Scotland now need to register with the local council, which must be satisfied they are “fit and proper” renters.

The crucial point is that you can never rest on your laurels. A bad set of tenants, or a blasé child, can make a property unsellable or unrentable very easily. “Termly inspections is probably the minimum you should insist on,” says Wilson Hunter of the ESPC. “If you use a letting agent, check how often they inspect the property and demand a report. Otherwise, you could face a nasty bill to get your house back in order.”

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