Despite the well documented fall in house prices, first time buyers are still struggling to get on to the housing ladder - with some couples having to save an entire year's pay just for a deposit.
A new study by the Royal Institution of Chartered Surveyors (Rics) calculates that a couple in the bottom quarter of earners in the UK needs £27,738 to pay the up-front fees on a house purchase: equivalent to over one year's take-home pay.
Many buyers had that the falling prices recently experienced in the sector would help them gain a foothold on the property ladder, but the ongoing credit crunch has also increased the amount required by lenders for mortgage deposits.
Rics' senior economist David Stubbs explained: "Access to the housing market has deteriorated as the credit crunch has taken hold of the mortgage lender sector. 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."
The figure of £27,378 is equal to the amount a couple would need to secure a mortgage and buy a house, and is much more than the 21 per cent of earnings needed for an equivalent couple in 1996.
As well as increasing monthly costs of mortgages due to higher interest rates banks have also increased up front arrangement fees. Since last year the average arrangement fee set by banks for a variable rate mortgage has almost tripled.
This hike in fees even prompted the Chancellor Alistair Darling to threaten to refer the matter to the city watchdog, the Financial Services Authority.
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