Alliance and Leicester's quarterly Moving and Improving Index has found that first time buyers expectations of house prices are inconsistent with reality, with most only expecting to pay up to £120,000.
The study shows that 60% of potential buyers who are currently renting or living with their parents plan to buy a property costing just £120,000 - which is a shortfall of around £29,000. The real cost of an average first time buyer property is £149,470.
Borrowers in their thirties are planning to spend the least, with 71% expecting to buy a home for £120,000. The index also shows that 64% of women compared with 57% of men hope to buy their property at well under the national average price. Twenty eight per cent of those polled felt that they could not afford to get onto the property ladder at all.
The study found that 41% of those in their thirties, 34% of those in their forties and 33% of those in their fifties cannot afford to buy. Only one in ten who do not already own their own homes feel optimistic enough to be looking to buy their first property.
Our view
Property has always been a good, longer term investment and most people want to one their own 'castle' anyway.