STUDENT DEBT COULD TRIGGER CRISIS IN HOUSING MARKET (David Rendel)

STUDENT DEBT COULD TRIGGER CRISIS IN HOUSING MARKET

March 10, 2004 12:00 AM

"The Prime Minister clearly doesn't understand one of the likely side effects of his own student top-up fees policy", said Liberal Democrat Higher Education Spokesperson David Rendel MP after today's Question Time in the House of Commons.

Mr Rendel challenged the Prime Minister about the plight of graduates who are unable to get a mortgage because of their debts.

Commenting, he said:

"Until now, new graduates have been the main source of first time buyers. Debt is now preventing many of them from entering the housing market, which could cause a significant downturn in the near future."

Students from the poorest families will graduate with debts of nearly £20,000, the Higher Education Minister conceded during the Committee Stage of the Higher Education Bill. Barclay's Bank says that graduate debt will top £30,000 by 2010.

Mr Rendel raised the case of his constituent, Ms Caroline Cocker, who has been told by her mortgage advisor that her student loan debt of £12,000 limits the amount she can borrow, making it impossible for her to get a mortgage.

Mr Rendel added -

"Students graduating with five-figure debts are finding it impossible to get onto the housing ladder. This situation will be made far worse if top-up fees are introduced and graduate debts reach as high as £30,000."

ENDS