The Financial Conduct Authority has said that student loans are now being considering when applying for mortgages, due to the Mortgage Market Review’s new guidelines.
Many current students are taking out loans of £9,000 a year to cover the increased tuition fees, not including maintenance loans. These loans will be included in the affordability calculation for mortgages and seen as a committed expenditure.
Alex Burgess, British Money Director and former MBA student said: “There appears to be a common misconception among students that anyone who has taken out student finance will have their loan discounted, but this simply isn’t the case.”
Such news will increase demand on the rental market, as more mortgage applications have the potential to be refused. Landlords and letting agents, therefore, must get organised, and are encouraged to use property management software to do so.
This news for students ties in with the Bank of England’s recent spotlight on the fall of mortgage approvals. In April, 62,918 mortgages were approved, the lowest number since July 2013.
Therefore, the MMR’s new guidelines may affect students, but they also affect many others applying for loans. Their tighter lending rules and tough questions are causing a decline in approved mortgage applications.
Rental demand in the UK already outstrips supply, so property managers must get organised in order to capitalise on such demand. Web based property management software, like Arthur, is an efficient means of improving organisation; it connects and coordinates property managers, letting agents, tenants and contractors, providing practical solutions for all parties.
If you are a property manager, property owner, landlord or letting agent, your business will save time and money by using Arthur. Try out the free Arthur Demo today to see how!