FUNDING YOUR CHILD’S EDUCATION

Through Property

Gordon Franks, Managing Partner of Lifestyle Property, suggests a way around your next inflation-driven worry

With rising university fees, it’s hard to know how to save for your children’s education. It feels like every day, the cost of a university degree goes up, and if you’re not careful, you’ll be left with a bill that you may not be able to afford, or your children will have to enter adulthood with a student loan.

UK tuition fees for international students: If you want to send your child to a top UK university as an international undergraduate, the tuition fees may span from £18,365 to £58,038 per year, depending on the chosen course and university.

For example, Oxford’s tuition fees for international students in 2023 range between £28,950 and £44,240. In 2021, the same fees were between £26,770 and £37,510 per annum.

Factoring in costs of living (in London, £1,400 per month, £1000 in other cities) in addition to the tuition costs, you can be looking at spending, on average, £12,000 to £16,800 per year.

Bottomline: Tuition prices are rising faster than inflation, and it’s only going to get worse from here. If you don’t start planning now, you may not be able to afford your child’s education costs down the road.

How investing in property can fund your children's education costs. To accumulate enough money to finance your child’s education, which throughout a three- to four-year course can easily reach HK$2 million (currency equivalent) or more, you need to start saving sooner rather than later.

Traditionally, mutual funds may have been used, but many people now consider property investment as it can provide greater returns and less volatility.

For example, you can purchase a property valued at £250,000 for an initial deposit of £12,500 and monthly payments of £2,605 over the build period, typically 24 months. Going forward, the mortgage would be financed by rental income, and you’d have a self-supporting investment property with debt being repaid through rental.

Fast forward 20 years, and the property may be mortgage-free and producing rental income, which could assist with education funding. Alternatively, you could sell the property to pay for the education costs. Assuming a modest 3% annual increase, this £250,000 property in 20 years would be valued at £451,000, which should be enough to cover university costs. As such, you can see the power of using property as a tool to fund education expenses.

Lifestyle Property makes it easy for anyone to invest in property, regardless of budget or experience. We offer various property options that are perfect for any stage of life. Plus, our team of experts are always here to help guide you through every step of the process. Contact us today at www.lfsproperty.com or via WhatsApp at 9635 4397 and let us show you how easy it is to invest in property.