First-time buyers face the toughest struggle for a generation to get on the housing ladder after the number buying their first property dropped to the lowest level for 26 years.

Hundreds of thousands of people have been forced to stay in rented accommodation an extra year after the cost of getting on the property ladder broke through the £150,000 mark across the country and £250,000 in London.

Figures released by the Halifax, the mortgage lender, estimate that the number of first-time buyers this year would be just 315,000. This is the same as 1980, when the country was heading towards recession and interest rates and unemployment were shooting up.

Since 2001 the average price paid by first-time buyers almost doubled, while in the rest of the country properties rose in value by an average of three quarters.

This has forced many new homeowners to borrow beyond their means or rely on parental help to get on the housing ladder.

Fewer than 10 per cent of new homeowners borrowed from their parents in 1995, compared with nearly 50 per cent in 2005, according to the Council of Mortgage Lenders.

The figures will be a particular blow for Gordon Brown, who has come up with a blizzard of initiatives to help those wanting to buy their first property. He championed them in his Pre-Budget Statement more than two years ago.

But initiatives such as a Treasury-backed shared equity scheme have been criticised for not helping enough people because only buyers who meet strict criteria are eligible.

About 80,000 households have benefited since 1998, although this has not offset the huge drop in first-time buyers under Labour, which peaked in 1999 at 593,000.

In the past 12 months the price of the average first home rose 11 per cent, from £137,122 to £151,565.

This year was the first where no regions had first-time buyers’ properties for an average of less than £100,000.

The problem is particularly acute in the South East.

First-time buyers in Gerrards Cross in Buckinghamshire, one of the most expensive places to buy in the country, would need to borrow nearly 17 times their average income of £43,422 to afford an average property costing £724,594, the Halifax said.

Yesterday experts were predicting that 2007 could be even worse in the South East, where property prices have continued to spiral.

Foxtons, the estate agent, predicted a rise of 8 to 10 per cent in London over the next four to six months.

The drive upwards has been fuelled by a shortage of supply and a spate of million-pound city bonuses, which are expected to result in the busiest January in 25 years.

The Government has also recently set a target to build 200,000 homes a year to respond to rising demand.

But Michael Gove, the shadow housing spokesman, said that this was not enough. “Britain’s housing crisis is hitting first-time buyers hardest of all. More and more young people are having to rely on the bank of mum and dad to get on the property ladder. Britain’s social mobility is suffering because those without access to inherited wealth are finding it increasingly difficult to get on the property ladder.

“Government needs to think radically and imaginatively about increasing the supply of housing — it’s a sad fact that year on year fewer new homes have been built under Labour than under the previous Conservative Government.”

Concern is mounting that some buyers are overstretching themselves by taking on too much debt and are at risk of defaulting on their mortgage repayments.

Borrowers asked for an average of 3.27 times their income in October, according to the Council of Mortgage Lenders, while some lenders have been offering loans for up to seven times income, or more than 100 per cent of the property value. The average deposit has also increased by more than 100 per cent, from £13,249 in 2001 to £28,130 in 2006.

Outside the South East there are signs of optimism, with economists predicting that the lack of affordability, together with possible further interest rate rises next year, could dampen the housing market in 2007.

Fionnuala Earley, group economist at Nationwide, said: “We expect worsening affordability and recent interest rate hikes to affect the levels of activity in the market in the coming months. This will feed into a slower rate of house-price growth in the second half of next year.”

Buyers in the North West stand a better chance of getting on the property ladder. The cheapest town for first-time buyers is Nelson, Lancashire, where the average property price is £103,465 — 3.4 times the average income of £30,660.

Land grab

• The average house price in the UK is £187,995
• The typical age of a first-time buyer is 33
• The average salary of a first-time buyer is £29,610 — 35 per cent more than the average of 22 to 29-year-olds
• The average deposit is £28,130, or 19 per cent of the property price. It was £13,249 in 2001
• A typical first-time buyer will take five years to save up a 5 per cent deposit
• The average stamp duty for a first-time buyer in London is £7,500 — 3 per cent of the price. Elsewhere, the average duty is £1,500
• Almost three quarters of properties bought by first-time buyers were flats, terraces or maisonettes
  
  Source: Halifax

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