University graduates will struggle to get mortgages as they will still be saddled with high levels of student debt in their 30s and beyond.
Tuition fees of £9,000 a year will prevent thousands of middle-earning professionals from securing a mortgage, according to a new report by the Higher Education Commission.
Mortgage lenders are required to take student loan debt into account when considering applications, which could squeeze many middle earners off the property ladder, the commission said on Tuesday.
It warned that graduates earning around £42,000 a year would be hardest hit, as many would still be making "significant" monthly repayments into their 50s.
Public sector and healthcare professionals, teachers and accountants will all struggle.
The nine-month enquiry said that lower-earners will benefit from more generous terms, while higher earners will pay back their student debt relatively quickly.
The independent commission called on the government to review the student loan system, which it branded "the worst of both worlds".
Graduates only have to start repaying their loans once the annual income of £21,000, which means many will be saddled with debt for decades.
Previous research has shown that 73% of graduates will still be repaying loans after 30 years.
They will qualify for the debts to be written off after three decades, when most will be in their early 50s.
The report said: "The Commission remains uncomfortable with the implications of such high levels of graduate debt at a time of stagnating wages and rising house prices."
It highlighted a report by the Institute of Fiscal Studies which said that professionals such as teachers will pay back between £1,700 and £2,500 annually throughout their 40s.
"The notion that a middle-earning teacher, health professional or manager will not be able to pay back their loan over the course of a 30-year repayment period, and once reaching a very successful salary level, raises big questions about the amount graduates are being asked to pay," the report said.
The Financial Conduct Authority recently changed its rules for mortgage applications, so that lenders must include monthly outgoings such as student loan repayments when assessing mortgage applications.
The soaring cost of writing off unpaid student loans means the new system is rapidly becoming more expensive than the regime of £3,000-a-year fees it replaced, the commission warned.
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