Must you wait till you're 33? Get on the ladder sooner

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The Independent Online

Who'd be a first-time buyer? Fewer than at any time in the past 25 years, estimates the Halifax, whose own research has found that the average nationwide price paid for a starter home last year was £137,122.

As a result, the average time spent saving for a deposit to get on the property ladder is now five years, the bank estimates. Compare this to 2000 when it took three years of saving. This all leaves the average age of first-time buyers today at 33.

"They need to save harder and for longer than ever before to put down a decent deposit on a house," says Tim Crawford, group economist at the Halifax.

Although most buyers want to put more by for a deposit, many complain of being held back by low pay and personal and student debts, a survey from Abbey reveals.

While nearly a third save with their partner and 11 per cent hope to get some financial help from their family, 40 per cent have to save on their own.

It's not all bleak, though. In 2003 and 2004, when house prices were roaring ahead at nearly 20 per cent, many found it nearly impossible to save for the minimum 5 per cent deposit. But the inflation in bricks and mortar has slowed and, while it can still be hard to set money aside at the same time as renting, the effort and the wait should prove their worth.

A deposit of 5 or 10 per cent of the property value "will mean you not only get access to lower interest rates but also a wider choice of lenders - and possibly greater income multiples", says David Hollingworth of mortgage broker London & Country.

Those struggling to scrape together enough for a 5 per cent deposit should ask parents and relatives for help, says Melanie Bien, associate director at broker Savills Private Finance. They may have spare cash to lend or give , or they could raise capital from the equity in their own homes with a remortgage deal.

Those determined to take the first step sooner rather than later could look at 100 per cent mortgages. However, if the housing market falls, you could quickly find yourself in negative equity - where the property is worth less than your loan.

Watch out too for the higher lending charge (HLC) on 100 per cent mortgages, which can add several thousand pounds to the cost of your loan, warns Nick Gardner at broker Chase de Vere Mortgage Management. "While it is in effect an insurance policy to protect the lender against the borrower defaulting, it's the borrower who pays."

Lenders such as Northern Rock, Nationwide Building Society and Cheltenham & Gloucester tend not to levy HLCs but to charge higher interest rates as a result.

While a 100 per cent loan will help you on to the property ladder and stop you throwing money away on rent, it can work out up to 1 per cent more expensive than the best two-year, three-year and five-year fixed-rate deals, says Mr Hollingworth.

"You can get a 100 per cent two-year fix from Scottish Widows at 5.29 per cent," he adds. "But this compares with a two-year fix from the Woolwich - for up to 95 per cent of the property value - at 4.69 per cent."

If this sounds too risky, consider guarantor mortgages, where your parents can use their income to boost the size of loan available to you.

Fiona Power, 26, from Hove in Sussex, is halfway towards a 5 per cent deposit of £7,500 to buy a £150,000 studio flat in Brighton - she tries to save £300 a month. "I've been frugal with my spending and cut down on going out. I hope to think about buying early next year."

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