Lord Browne’s report on university funding risks landing a critical blow to an already damaged element of the housing market. With the average age of an unassisted first time buyer (FTB) being reported as 37 and fears that this could rise as high as 43, more and more look set to be prevented from ever owning their own home. The number of people taking out their first mortgage has more than halved over the past decade, from well over 500k to below a worrying 200k today. The FTB is undoubtedly endangered.

Against this backdrop, the proposition that graduates who earn more will pay more back, while already paying more through the tax system, begins to sound less simple. It has also been mooted that higher earning graduates could be financially penalised for paying off their debt early, or asked to pay higher interest rates on it, in an attempt at fairness. If implemented, this larger university debt could cause even the better off graduates to struggle to save for a deposit and demonstrate their ability to afford a mortgage.

In Grant Shapps’ Age of Aspiration speech, he reinforced the importance of getting FTB s into the market. However, by focusing only on the shared ownership and social housing elements, Shapps appeared to miss the bigger picture, which has consistently presented a challenge to successive governments seeking to widen the opportunities for home ownership.

Shapps’ calls for a period of house price stability to prevent generations of potential homebuyers from being priced out of the market may be like trying to stop the tide! On a small island, which is heading towards a housing shortfall of around 1 million units by 2016, simple supply/demand economics suggest that prices will recover and probably rise following the current painful period of correction.

Affordability, the ability to save the required deposits, and increased university fees, mean a further tranche of those who would ordinarily be the FTB s of the next decade, are going to struggle. The wider implications of the university fees proposal shouldn’t be ignored and the financial services and house building industries might like to consider adding their voices to the debate. Even endangered species can, with determination and support, recover and thrive.

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Alison Beech, Business Relationship Director, Valunation