Texpect that my son will be starting his course at university in exactly three years’ time, and at that stage I am planning to buy a flat for him to live in. Current prices of the flats I am anticipating buying are £17,500. If house prices are expected to rise at the rate of 7.5% compounded annually, how much should I set aside now in order to pay for the flat, if interest rates are to average 10% per year, compounded annually? Solicitor’s fees etc.
will amount to 2% of the purchase price, and this amount must be included in the calculation of the amount I am to set aside.