Students are saddled with average debts of £44,000 and this could harm their chances of home ownership - meaning more people will be renting. In a poll of UK mortgage lenders, some 59 per cent said they believe higher student debt and loan repayments will become a bigger barrier to home ownership for younger borrowers.
Mortgage advisers are even more damning about the effects of student loans, with 66 per cent believing higher student debt will contribute to locking future generations out of the housing market.
Peter Williams, executive director of the Intermediary
Mortgage Lenders Association, which conducted the
research, said: “A clear majority of brokers and
lenders believe increased student debt and bigger
loan repayments will become a greater barrier to
home-ownership for prospective buyers.
“Today, first-time buyers’ student debt is much
smaller than that faced by more recent graduates,
and the industry is rightly concerned that this could
grow into a more significant problem.
“The challenges faced by current first-time buyers
are already numerous enough, without a huge
student debt weighing them down.”