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Journal Article

The changing route to owner occupation: the impact of student debt

Authors

Publication date

2010

Abstract

The 1990s saw a considerable fall in young adult homeownership rates in Britain. There is a concern that the future might hold further falls as a result of reforms to financing higher education. Using estimates from a housing tenure choice model, this paper conducts micro-simulation analyses to assess how this change could affect young adult homeownership transitions. The simulations reveal that increased student debt levels and the new repayment profile and their interaction with lender-imposed borrowing restrictions delay a first-time homeownership transition. The extent of the delay primarily depends upon the expected earnings profile, but lender criteria and general rises/falls in real house prices are also important. The analysis suggests that there will be much greater variation in the timing of house purchase between different groups of future graduates, brought about by increased graduate earnings heterogeneity, homeownership affordability schemes targeted toward specific types of households, and parental financial assistance.

Published in

Housing Studies

Volume

25 (1): 39-62

DOI

http://dx.doi.org/10.1080/02673030903361656

Subjects

Young People, Debt: Indebtedness, Microsimulation, and Housing Market

Links

http://serlib0.essex.ac.uk/record=b1598948~S5

Notes

Albert Sloman Library Periodicals *restricted to Univ. Essex registered users*

#513249


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