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Student debt 'unlikely' to affect FTBs
31 January 2008 10:30
Student debts are unlikely to prevent first-time buyers (FTBs) from getting onto the property ladder, according to one broker, even if they missed the odd payment on them.
Firstrung CEO Paul Holmes noted that people rarely purchase their first home straight after leaving university anymore and that the student debt that they have left when they eventually do look to buy is unlikely to hinder their suitability for a mortgage.
He was also sceptical over reports that any missed repayments on student loans will go onto people's credit records and could result in their being turned down for mortgages, countering that credit agencies do not tend to have this depth of information available.
Mr Holmes instead deemed that while borrowers may be required to record that they do have student debts when applying for a mortgage, the slow rate of repayment means that this is unlikely to deter any lenders from granting them one.
Nonetheless, a recent survey by Scottish Widow's Bank did find that more than half of all Britons who have left university in the past decade have yet to get onto the property ladder, of whom over two thirds attributed this to excessive house prices.
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