First time buyers reliant on family

WC1 property

More first-time buyers (FTBs) are relying on financial help from family and friends in order to get on the London property ladder, according to new figures released today.

Research from Hometrack showed that 14 per cent of FTBs relied on help from relatives or friends in 2006, although a further 14 per cent were able to buy a property without any financial support.

The drop in buyers able to go it alone is blamed on soaring house prices and interest rates up at 5.25 per cent.

Hometrack claims that while FTBs in the 1980s and 1990s were regarded as market drivers, established homeowners with existing equity are now driving prices up, and FTBs out.

Richard Donnell, director of research at Hometrack, said that more FTBs are likely to turn to the rental market as house prices continue to climb.

He said: "In the short term the pressure on first time buyers will lead to increased demand for rental properties, which in turn will lead to higher rental values.

"The current growth of house prices is unsustainable when so many people are being priced out of the housing market," he added.

The average cost of a home in England and Wales currently stands at £173,400, based on Hometrack's survey of 3,500 estate agents in England and Wales, up 6.7 per cent on last year's figures.

Doughty Street