Finding include:
* Top three factors that would help graduates get on the property ladder are lender related.
* One in seven graduates aged 25-30 say it will take up to 10 years to buy their first house.*
* Scottish Widows Bank has enhanced its graduate mortgage range to accommodate an ageing first time buyer market.
The report has also found that two thirds of graduates under the age of 30 still do not own their own home and one in seven graduates aged between 25-30 cannot imagine ever getting on the property ladder. However graduates feel this could change if their circumstances were considered by lenders: Specifically:
* Two fifths of graduates would be helped to get on the property ladder if they didn’t need a deposit.
* If lenders considered future earning potential rather than starting salary, over a third believe this would help.
* Over a third would be helped by lenders considering lending amounts more than three times their salary.
Although factors such as debt and ability to save are key reasons why graduates are not able to buy a house, it is clear that graduates do see ways around this issue but that lenders are often unable to accommodate their specific circumstances because of their inflexible approach to lending.
Graeme Hartop, Managing Director of Scottish Widows Bank comments: "Graduates are a group apart, with quite distinct circumstances. They are older than non graduates when they get their first salaried job, they have a lot more debt and they often embark on careers that have low starting salaries, but with big earning potential. As lenders, we have to take these factors into account and move away from a one size fits all approach to lending whilst maintaining a responsible approach."
Scottish Widows Bank has a range of mortgage products specifically designed to cater for graduates and first time buyers:
* 102% Graduate Mortgage with or without guarantor option
* 110% Professional Mortgage, with or without guarantor option
* Choice of fixed, discount or tracker rates
As a result of the findings of the Graduate First Time Buyer Report, which highlights an ageing graduate first time buyer market, Scottish Widows Bank has enhanced its Graduate Mortgage by extending the age limit for applicants to 35. Applicants no longer have to have been employed for 12 months and are eligible as long as they are in a permanent position and not serving a probationary period.
The Bank believes that taking a tailored approach to lending does not mean taking on more risk or lending more than people can cope with, but simply being sensible about the reality of the situation. Hartop adds: "Student debt isn’t going to go away and, if top up fees come about, will only get worse; nor are house prices suddenly going to drop 50% overnight, so something else has to change. We as lenders, along with Government and indeed students themselves, have to review our role in this equation."
