Why Parents Are Purchasing Property for Their Children in 2025

More high-net-worth (HNW) and ultra-high-net-worth (UHNW) parents are buying UK property for their children in 2025. For some, it’s about providing accommodation during university or early career years; for others, it’s an investment in their child’s long-term financial security.

Rising property prices, stricter lending rules for first-time buyers, and competitive rental markets mean that owning a property early can provide a significant advantage. However, financing these purchases isn’t always straightforward — particularly if the child will not be contributing to the mortgage or is not yet earning a stable income.

How Lenders View These Arrangements

When a property is purchased for a child to live in, lenders typically categorise the loan as a “regulated” residential mortgage if the borrower (the parent) owns it personally. However, there are some nuances:

• If the child is under 18, they cannot legally be on the mortgage.
• If the child is over 18, they may be able to be on the mortgage, but their income may not meet affordability requirements.
• Some lenders treat these as “regulated buy-to-let” arrangements, particularly if rent will be paid by the child or other occupants.

Specialist lenders and private banks can be more flexible, particularly for high-value purchases in prime locations (Private Bank Mortgages Explained: Benefits and Drawbacks).

Ownership Options

Ownership structure is a key consideration. While we do not provide tax advice, it’s important to understand that the way a property is held can affect lender choice, tax liabilities, and long-term flexibility. Common structures include:

• Parent-owned: The simplest route, where the property is in the parent’s name. This can be efficient for securing finance, as affordability is based on the parent’s income and assets.
• Joint Borrower, Sole Proprietor: Parents are on the mortgage for affordability but not on the title deeds, allowing the child to be the legal owner (Navigating Joint Borrower Sole Proprietor Mortgages in 2025).
• Company ownership: In some cases, families may purchase through a limited company, though this is more common for rental properties (Limited Company Mortgages Explained).

The right choice will depend on your family’s goals, long-term plans for the property, and professional legal or tax advice.

Funding Methods

While some parents choose to purchase outright in cash, others use borrowing to maintain liquidity or take advantage of low interest rates. Popular finance options in 2025 include:

• Residential mortgages in the parent’s name, with affordability based on their income and assets.
• Private bank lending, particularly for large loans on prime property. This can allow for more flexible income assessment, including foreign currency income or investment portfolio drawdowns.
• Equity release from another property in the portfolio to fund the purchase (Using Equity Release for Portfolio Growth).

Prime Location Purchases for University-Age Children

We are seeing strong demand from international HNW families buying apartments in London, Manchester, and other UK cities where their children will be studying. These purchases often serve dual purposes — providing secure accommodation during university years and functioning as a long-term investment that can later be rented out or retained as a family asset.

Private banks are often best placed to arrange finance for these purchases, especially when the buyer’s primary income is overseas (Foreign National Mortgages in the UK: What’s Possible in 2025).

Case Study: London Apartment Purchase for an Overseas Client’s Son

One Willow client, based in Hong Kong, wanted to purchase a £1.8 million apartment in Kensington for his son, who was starting a postgraduate degree in London. The client’s income was primarily in HKD, and his wealth was tied to investment portfolios.

By approaching a private bank with experience in multi-currency lending, we secured a sterling mortgage using his investment portfolio as part of the affordability assessment. This preserved liquidity, kept FX exposure manageable, and ensured the transaction completed before the start of term.

Key Considerations Before Proceeding

Buying a property for your child can be a sound decision, but it requires planning:

• Confirm lender criteria early — some lenders will not allow a non-owner occupier arrangement.
• Decide on the ownership structure before applying for finance.
• Ensure insurance, maintenance, and ongoing costs are budgeted for.
• Seek legal and tax advice to understand implications now and in the future.

How Willow Private Finance Can Help

At Willow Private Finance, we arrange property finance for HNW families buying homes for their children across the UK. We work with private banks, specialist lenders, and mainstream institutions to create tailored solutions, whether the goal is a pied-à-terre during studies or a long-term investment asset.

Our expertise ensures the finance aligns with your family’s objectives, provides the flexibility you need, and completes on time — even for complex international cases.

Frequently Asked Questions

What are the common ownership and finance structures when buying property for your children?
You can choose Joint Borrower, Sole Proprietor mortgages (parents support affordability but child is legal owner), or use limited companies (especially for rental/investment properties) while choosing who holds title. Willow Private Finance

Can the parents be on the mortgage without being on the deeds?
Yes — many lenders allow this “Joint Borrower, Sole Proprietor” setup, where the child is in title but parents contribute to affordability. However, not all lenders accept it, so criteria must be checked early. Willow Private Finance

Do private banks offer advantages in these scenarios?
Yes — especially for higher-value properties or cross-border income cases. Private banks can flex affordability rules (e.g. include investment portfolios) and structure mortgages in multi-currency or bespoke terms. Willow Private Finance

Is using equity from an existing property a viable funding method?
Yes — many HNW families use equity release on another property to fund purchases without liquidating investments. Willow Private Finance



What should you verify before proceeding?
You need to check whether your chosen lender accepts the structure (like non-owner contributors), decide ownership structure in advance, budget for ongoing costs (insurance, maintenance), and get legal/tax advice. Willow Private Finance

.

📞 Thinking About Buying a UK Property for Your Child?

Book a free strategy call with one of our mortgage specialists.

We’ll help you find the smartest way forward — whatever your plans in 2025.