Low income couples will find it “almost impossible” to afford to buy their own home, due to a mixture of high house prices and large deposits which are being requested by lenders.

The Royal Institution of Chartered Surveyors (RICS) have reported that a couple with a low income (£27,516 after tax) would have to save more than a 100% of their annual income (£27,738) in order to save up for a deposit. This figure is well up on the 21% of pay needed in 1996. It is now almost as difficult to get on the housing ladder as it was at the worst ever level, the third quarter of 2004.

House prices have increased an average of 10% a year since 1996, whereas the lowest incomes have increased by just 3.5%. But affordability has improved for those who are already on the housing ladder, and the credit crunch

David Stubbs, senior economist at RICS, comments: “With mortgage approvals declining, the picture does not look like improving in the latter part of 2008 and first-time buyers will find their path to home ownership increasingly blocked.”