The number of first-time buyers has fallen to its lowest since 1980 as rising house prices have forced prospective homeowners to rent properties or live with their parents.

About 300,000 people bought their first home this year, down from 532,000 in 2002, a report from Halifax, the UK’s biggest mortgage lender, shows.

The average cost of a first home rose by 15 per cent this year to £175,093. Those who bought their first home five years ago paid an average of £95,994.

A typical buyer new to the market is now unable to afford the cost of an average house in 96 per cent of towns in the UK – treble the number of towns that were unaffordable for prospective homeowners in 2002.

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In some areas – the South West, East Anglia, the East Midlands, Yorkshire and Humberside and Northern Ireland – the average house is unaffordable in every town.

House price increases have put the cost of even the least expensive terraced properties beyond the reach of new buyers in 75 per cent of towns. In 2002, those climbing on to the housing ladder could afford to buy a terraced home in 89 per cent of towns.

New homeowners are now increasingly in their thirties, rather than twenties, as a result of the time it takes individuals, or more often working couples, to amass sufficient savings.

Halifax classifies a house as unaffordable if it costs four times more than the annual income of a first-time buyer.

Richard Morea, technical director at London & Country mortgages, a mortgage broker, said: “In most cases, first-time buyers just can’t afford the mortgage repayments. House prices have simply left them behind.”

Stamp duty, which is payable on all homes worth more than £125,000, is also a burden. Halifax says the average first-time buyer pays stamp duty of £1,688.

Prospective buyers struggling with spiralling house prices are instead buying flats or putting their plans for home ownership on hold.

There are now nearly 2.8 million rental properties in the country – up 600,000 on 2001 – a recent report published by the Department for Communities and Local Government says.

An increasing number of young adults are also continuing to live at home with their parents. According to the Office for National Statistics, just under 60 per cent of men and 39 per cent of women aged between 20 and 24 still live at home, a rise of 8 per cent since 1991.

Grant Shapps, the Conservatives’ housing spokesman, criticised government policy for the falling number of new homeowners. “First-time buyers are the lifeblood of the market yet Labour’s meddling has left them unable to get on to the property ladder,” he said.

“Gordon Brown’s stealth tax rises, from stamp duty to inheritance tax to council tax, are all making home ownership harder and harder for more and more people.”

Labour defended its record, saying that a million more people have become homeowners since 1997. Yvette Cooper, the Housing Minister, said: “These figures reflect the fact that for 30 years this country has not been building enough homes to keep up with rising demand.

“That’s why we need three million more homes by 2020. Those who are still opposing more homes need to recognise the deeply unfair consequences for first-time buyers and young families if we don’t do more.”

Merseyside may become the destination of choice as Bootle is the most affordable town for aspiring homeowners. The average price tag of a home in the town is 3.4 times higher than the average income of a new buyer there. The next most affordable towns are Gosport in Hampshire and Lerwick in Scotland, at 3.5 times average income.

However, those eyeing up real estate in Henley-on-Thames should think twice. The town is the least affordable as the average property costs 13.1 times the average income of a first-time buyer.Ilkle,y in West Yorkshire, was the second least affordable town with average home values 11.9 times that of income.

Some estate agents forecast that house prices will stall next year, but experts gave warning that this will not be enough to help. Mr Morea said: “They need to come down to bring more buyers into the market.”

Martin Ellis, Halifax chief economist, said that the average age of new buyers was also rising steadily. “When they do enter the market, first-time buyers are now more likely to be in their thirties rather than their twenties and buy a flat rather than a terraced house,” he said.

He said the financial position of most new buyers was sound, with purchasers typically putting down a deposit of 20 per cent – equivalent to a year’s earnings.

The Royal Institution of Chartered Surveyors said that there may be some hope on the horizon. “While first-time buyers continue to struggle, the conditions should start to gradually thaw throughout 2008,” Simon Rubinsohn, RICS chief economist, said.

“There is huge pent-up demand from first-time buyers and should house prices drop in the early part of the year, many will be ready to pounce, especially if more repossessions filter through into the market.”

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