A recent release has suggested that increased student debt will lead to a drop in the number of young people able to enter the housing market. It is believed that this would be made worse by the Governments' plans to encourage more young people into higher education by 2010, and have said that lenders should anticipate future issues by looking to increase the number and the range of high loan-to-value mortgage products which will make first-time purchases more affordable to graduates.
Our view
Demand for property will always be there. If it does not come from youngsters it will come from migrant workers moving to the UK.
If demand falls, prices will fall until they reach a level that even debt ridden students can buy at. These are simple rules of economics.