More bad news for students and those looking into higher education – though not exactly groundbreaking news – according to new reports, that growing student debts will lead to a reduction in the number of mortgages available to first-time buyers according to mortgage brokers Trinity Financial Group.
Students are also finding themselves increasingly delayed when it comes to their first steps on the property ladder as they learn the hard way that university borrowing can dramatically affect an individual?s ability to buy a home later in life.
Aaron Strutt, a broker at Trinity Financial Group, said: “Many students will not be aware that their loan will reduce the amount that they can borrow by such a large amount.
“Many lenders now base the amount they will lend on an affordability calculation, which means that loans and credit card repayments are all taken into consideration. Higher debts will simply mean that it takes students longer to pay off their loan and that they will have to wait longer to get on the property ladder.”
Lenders suggested students may prefer to clear their debts before taking on a mortgage.
Bernard Clarke, of the Council of Mortgage Lenders, said: “Student debt is taken into account by some lenders, but it may also affect demand for mortgages. Some students may be more reluctant to take on mortgage commitments if they end up with more debt to complete their degree in future.”
