December 2009/January 2010
Will soaring student debt knock on door of housing market?
STUDENT debt now stands at £18 billion and is set to soar if university vice-chancellors get their way.
The Government is currently debating whether to allow universities to raise tuition fees, forcing students to take out even higher loans, inevitably curtailing their enthusiasm for a mortgage and the inevitable additional debt this entails.
Aside from the impact on students from poorer backgrounds who won’t be able to afford such an expensive education or those who won’t be able to get jobs that pay highly enough to repay their loans, no-one seems to have thought about the effect this will have on the wider economy, including our own industry.
According to the Push Student Debt Survey, undergraduates starting this year will owe an average £23,500 when they finish.
Some fear it could rise to over £30,000 by 2016 — and that includes those who have part-time jobs and help from the ‘bank of mum and dad’.
Understandably, it has provoked outrage from the National Union of Students.
Is it any surprise then that a survey in 2007 showed the average age of the first-time buyer had risen to 34 from 27 in just 30 years.
If student loans and debts do rise, will people be in their forties by the time they get on the first rung of the ladder in years to come?
No-one doubts that the cost of higher education is expensive and that some students don’t appreciate the real value of their studies.
But the pressures on them when they finish their course are far greater now than they have ever been in the past and could become a whole lot worse for them in the future, especially if they have to pay back loans at commercial rates, as is widely predicted.
Add to this the difficulties caused by the current economic downturn, and we can understand how hard it is for many graduates to kick-start their careers.
The flip side is that students are staying on in further and higher education, with one million students applying for loans this autumn, a massive increase on last year, while a further two million are still paying off their debts.
The time when graduates could leave university relatively debt-free and walk straight into well-paid jobs has now gone, but increasing their fees in the future is surely too high a price to pay, not just for the individuals concerned but for the wider economy as a whole. Don’t expect roses round the door for some years to come.
So how soon will HIPS be suspended after the General Election?
WITH just a few months to go to the General Election in 2010, all eyes will be on the Tories, should they form the next Government, and what will happen to Home Information Packs.
Shadow Housing Secretary Grant Shapps has made it clear he will scrap HIPs and I suspect this will initially take the form of a suspension until the legislation can be revoked by Parliament.
The day can’t come soon enough, in my opinion. However, it would help us to know sooner rather than later what his plans are to replace HIPs.
The green agenda in their manifesto will mean that Energy Performance Certificates will stand on their own but what about all the other aspects of the house moving process? How much of an exchange-ready product are we likely to see?
If the Tories want to be truly green, I would like them to offer grants to householders to insulate their properties and be more eco-friendly, but with restrictions on how soon you can sell a property after receiving the money — otherwise it has to be paid back. This system already operates successfully in countries like Canada.
The downside of the whole HIPs debacle is that jobs will inevitably be lost and it is my hope that those affected find other work quickly and are compensated in some way.
It was a brave person who entered the HIPs profession knowing it would be short-lived but when one industry collapses another usually arises and their talents will no doubt be put to good use once more.
Estate agency ads under the spotlight
ESTATE agents need to pay close attention to the rules laid down by the Advertising Standards Authority as they may not realise that seemingly innocuous advertising and marketing materials might be deemed inappropriate or likely to cause offence.
For example, you can be investigated if just one person complains about a promotional mailer, even if it is widely accepted by thousands of recipients, and forced to bin every single item you’ve printed if the ASA rules against you.
Even an envelope can land you in hot water if you don’t put your logo on it or make it clear it is a marketing item, while text that invites people to contact an agent as a ‘matter of urgency’ can be deemed to cause distress.
Claims about being market leader in a local area are also under scrutiny, with online marketing data recently called into question by the ASA.
Board counts have already been criticised as a measure of success in a local area because not everyone puts up a board.
The Committee of Advertising Practice says the basis of any claims needs to be explicit and should state clearly that signs do not necessarily equate to completed sales. Similarly, using Land Registry data for specific postcodes is also a minefield.
Estate agents have long used clever marketing tactics to promote their products and services in order to increase their market share.
Modern day agency is all about canvassing, getting as much publicity into the market as possible, dropping leaflets, letters and cards.
A discussion within our industry about what you can and can’t do is long overdue.
I would urge the ASA to come to the table to listen to what estate agents have to say, before creativity and innovation is stifled and people become afraid to say anything.