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Last Updated: Thursday, 24 August 2006, 09:43 GMT 10:43 UK
First-time buyers 'need 29,000'
Browsing an estate agents window
Many buyers are having to rely on financial help from parents
The average couple needs to save at least 29,000 to pay for the deposit and stamp duty on their first home, a survey has suggested.

The Royal Institution of Chartered Surveyors' (RICS) study highlights the burden imposed by soaring house prices.

Prices have risen by 184% since 1995, three times faster than take-home pay.

RICS predicts interest rates will probably be raised twice more over the next 12 months, leading to a slowdown in house price inflation next year.

Like other organisations that monitor the housing market, RICS has been forced to revise upwards its prediction for house price growth this year.

It now expects property inflation to reach 7% - up from an original forecast of just 4% - before slowing to 3% in 2007.

House prices have been driven higher, according to RICS, by the combination of a stable economy, low interest and mortgage rates, high levels of employment and an insufficient number of new houses being built.

"Unless house building levels improve, and levels keep pace with population growth and rising income and wealth, people will continue to find it difficult to access the housing market," said David Stubbs, an economist at RICS.

Parental help

Earlier this month the Council of Mortgage Lenders (CML) reported that in June the average first-time buyer was paying 3.21 times their income to get a mortgage, the highest figure on record.

But long-standing fears that they would be driven out of the market entirely, bringing the housing ladder crashing down, have not been realised so far.

Despite the high levels of borrowing required of them, the number of first-time buyers taking out new loans went up in June to 39,500 - the highest number since December 2002.

The rise is put down to first-time buyers increasingly relying on their parents to finance their first step into the property market.

Parents are contributing an average of almost 18,000 to help their children do this, the Alliance & Leicester bank said recently.

Earlier this year another mortgage lender, the Bradford & Bingley, published research suggesting that 40% of first-time buyers relied on their parents for financial help when buying a home.

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