An accessibility index, developed by the Royal Institute of Chartered Surveyors (RICS), has found that the cost of becoming a home buyer in Great Britain has grown by 8.4% in the year to 2007 Q2 and by around 350% since 1996.

A couple who are trying to buy their first property, both on lower quartile combined earnings of £25,899, will now have to save up to the equivalent of 96% of joint take home pay to build up the £25,600 needed for up front buying costs on a typical home, deposit and stamp duty. This equates to a substantial rise from the low point of 21% of joint take-home pay required in 1996.

Affordability has deteriorated to almost record levels. A couple on lower quartile income now has to spend 44% (up from 38% in Q1 2007) of their combined take home pay to service their mortgage, only 4% below the all-time high of 48% in Q1 1990. With the whole of the interest rate cycle yet to filter through, repossession levels are set to continue to rise.

David Stubbs, RICS senior economist, said: “First time buyers are facing an enormous struggle to access the housing market. This may worsen if the turmoil in the US market forces mortgage providers to tighten lending criteria and demand even higher deposits.

“Even if prospective first-time buyers make it onto the market, they face mortgage payments which take up a higher percentage of their take home pay than at any time since 1990. House prices have risen by over 11% a year since 1996 whereas first time buyers’ income has only risen by 3.5% a year. This has forced buyers to borrow ever greater amounts and now higher interest rates are applying pressure to the household finances of recent buyers.”