Published 30 November 2018 · Last reviewed 27 November 2022 · Older article — see current rates

Getting a Mortgage and Buying property for your children

Buying property for kids can be a way of securing their future. Most parents will look to buy property for their kids when they are grown up or studying, and there are a number of mortgage solutions available, however, did you know you can start buying property for kids before they reach the age of 18 using a special “buying property for kids” mortgage product?

That’s right buying property for kids with a special mortgage product can start as soon as they are born. The upside is of course you and they should benefit from property value inflation. In fact, future equity could be used to fund their university fees.

How does the “buying property for your children” mortgage product work?

• No minimum age for kids.
• In short a limited company is formed with the parents as “Directors” and the kids as “Shareholders”. The parents are Guarantors for the mortgage and must be over the age of 25 years.
• A minimum of 20% to 25% must be put down as deposit.
• The property must be bought with the intention to let to an unrelated tenant.
• The property could have a single family, multi-let or HMO configuration. Holiday Lets and Airbnb are not permitted.
• Maximum 20 properties up to a maximum mortgage total of £10m.
• Mortgage terms up to 35 years.
• Rental coverage 125%.
• Previous credit problems over 12 months ago may be considered.

Niche Advice offers appropriate advice to parents buying property for kids (even those who are under the age of 18 years).