Debts keep houses out of graduates’ reach

Debts keep houses out of graduates’ reach

	Published : Sat, 12 Nov 2005 20:05 By : Phil Bateman Print this Story

Whoever believes that a degree is a ticket to a secure career and a home, needs to think again. In a survey by Scottish Widows Bank, 10 percent of recent graduates regretted having opted to go in for university education because their debts denied them the opportunity to buy a house.

The survey which interviewed about 1,500 graduates in the age group 21 to 35, said over 65 percent of under 30s graduates did not own their own home. Of these, a similar proportion considered current house prices beyond their reach, despite property surveys indicating a slowdown in the house price inflation.

One in five simply feared they would be unable to buy a house for another ten years, a slightly better situation compared to last year’s ninety percent of graduates who considered house prices too high.

The most striking finding was that more graduates felt hampered by their debts in their effort to own a home.

The general view was that the recent cut in borrowing cost and the slowdown in the property market should have made the situation better compared to a year ago. A spokesperson for Scottish Widows said that that wasn’t the reality. Debt was the biggest obstacle for 44 percent of graduates (last year it was 55 percent). 10 percent even said that had they known about the growing debt problem they would have chosen otherwise rather than go in for a degree.

On the positive side, 58 percent said they were hopeful the Homebuy scheme would make it easier them to buy a house. About 50 percent were happy with the government move to raise the stamp duty threshold (after which the house price attracts a duty) to £120,000.

Forty percent of graduates who did own a house did so only because it was either gifted to them or bought on a loan from a friend or relative.

Scottish Widows urged the government and lender to provide more assistance to new graduates to get them onto the property ladder.