18-35 student loans may block mortgage applications on affordability criteria | PLSA
18-35 student loans may block mortgage applications on affordability criteria

18-35 student loans may block mortgage applications on affordability criteria

19 September 2016

Over the next few weeks hundreds of thousands of young people will be heading off to university for the first time. For many this will be their first real taste of freedom, and more importantly financial freedom as Freshers’ Week will be when most students receive the first tranche of their student loan.

New research from the PLSA reveals that over half (54%) of 18-35 year olds with a student loan don’t consider it to be debt and 64% believe their student loan will not count against them when applying for a mortgage.

A typical student studying in England will graduate with over £40,000 of student debt1 which they are told will not affect their credit rating. Although this is correct, since the Mortgage Market Review, introduced in April 2014, lenders can include student loan repayments into mortgage affordability calculations. As a result student loan repayments may affect someone’s eligibility for a mortgage under those calculations.

Our research highlights how strong the desire is among 18-35 year olds to invest in property. Given an unlimited sum of money 42% say they would prefer to invest in property to get the best return, and almost one in five are already saving towards a property (18%). Recent research has also shown that 69% of young adults feel that owning their own home is essential to feeling that they have succeeded in life2

Joanne Segars, Chief Executive, Pensions and Lifetime Savings, commented:

“It’s very important that young people have an accurate picture of how their student debt could affect their plans to get onto the property ladder. In this current climate getting started is tough for young people, property prices are high and graduate salaries are at their lowest since October 20133 - and they also face a struggle to save a deposit with interest rates so low.

“Having a clear understanding of their situation will help young people plan confidently for their long-term financial future, including plans for purchasing a property which many people tell us they factor into their retirement plans.”





We’re the Pensions and Lifetime Savings Association, the national association with a ninety-year history of helping pension professionals run better pension schemes. With the support of over 1,300 pension schemes and over 400 supporting businesses, we are the voice for pensions and lifetime savings in Westminster, Whitehall and Brussels.

Our purpose is simple: to help everyone to achieve a better income in retirement. We work to get more money into retirement savings, to get more value out of those savings and to build the confidence and understanding of savers.


PLSA commissioned ComRes to conduct a consumer poll of 18-35 year olds. ComRes interviewed 962 British adults aged between 18-35 online between 25th July and 9th of August 2016. Data were weighted by region to be representative of all British adults; by gender, age and socio-economic grade to be representative of all British adults aged 18-35. ComRes is a member of the British Polling Council and abides by its rules.

[1] PLSA research on 18 – 35 year olds’ attitudes to saving – August 2016

[2] The Yorkshire Building Society -  - March 2016

[3] The Telegraph - Class of 2016 feels the pinch as graduate jobs fall off – 31.05.16

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