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Graduates shun property ladder due to debt levels

26th July 2006 | back to article listings BACK    print this article PRINT

The image of a secure employed graduate making their fledgling step on the property ladder with their first mortgage is a myth, according to new research.

In fact, graduates feel so weighed down by the thousands of pounds of debt levels they experience upon leaving higher education that they are unlikely to even consider buying a house.

This is the verdict of new research published today by consultancy firm Thomas Charles, which found that just under a quarter – 24 per cent – of graduates are in such a position while 42 per cent feel their debt levels has delayed their initial property investment by a period of between three and ten years. The Thomas Charles survey studied 985 people who had graduated since 2001 and discovered that just ten per cent had managed to make their first step on the property ladder and acquired a mortgage.

James Falla, Thomas Charles director, said: "For many the idea of ever getting on the property ladder seems a distant prospect and for a considerable number, a quarter of our survey, it appears impossible in the foreseeable future."

"With 60 per cent of graduates leaving university with a student loan debt legacy they are already off to a bad start."

First time buyers in the UK face a notoriously difficult ride, particularly in London and the south east, where prices have continue to rocket over the last few years. Recent research by mortgage lender Alliance & Leicester discovered that the average first time buyer has to save in the region of £270 a month for three and a half years to get together the required average deposit price for a UK property.

The research from Thomas Charles showing many graduates being put off from the property market by their debt levels goes against another new set of figures published today by online credit monitoring service CreditExpert. According to the company's survey of 2,000 adults across the UK, Brits are feeling increasingly comfortable with their levels of debt.

CreditExpert's figures showed that 76 per cent of borrowers were happier with their debt levels in the second quarter of 2006 – a one per cent increase on the fist quarter of 2006. The company's personal credit index also found a six point improvement in consumer credit confidence since the start of the year, rising from 100 in January to 106 in April.

With the property market proving a difficult proposition for many first time buyers, a number of UK investors are being tempted by savvy buy-to-let deals, which allow market value accumulation and a substantial and regular income in the meantime.

This is a press release by Assetz also available at http://press.assetz.co.uk/articles/2847.html. Alternatively, please see our full press release archive.

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