House prices for first-time buyers surged to a record high in August, with the typical first-time buyer paying 3.8pc more than they would have done a year earlier. The average price paid for a starter home in the UK is now £215,000. With a deposit of 10pc, this means buyers would need a salary of around £45,000 a year to get their first step on the housing ladder.
Prices for first-time home owners have risen despite Government efforts to make houses more affordable for young buyers.
The Government's flagship scheme is Help to Buy, which allows people to buy a house priced up to £600,000 with a deposit of as little as 5pc. However, a shortage of homes on the market is pushing up prices as supply cannot keep pace with demand.
It means the number of first-time buyers aged between 16 and 24 has collapsed in recent years. From a high of one in three in the mid-1980s, now just one in 10 people aged under 24 are able to afford to buy.
Prime minister David Cameron has pledged that by the end of this parliament, 200,000 started homes will be built. New housing developments will offer a certain amount of properties to first-time buyers under 40 for 20pc less than the market rate.
The price of these "starter homes", after the discount is applied, will be capped at £250,000 across the UK and £450,000 in London.
Overall, UK house prices rose to a record peak of £284,000 in August, after climbing by £2,000 on the month before, according to data from the Office for National Statistics.
Prices rose 5.2pc over the year, with property values in parts of northern England rising at a faster pace than London.
In London, prices increased 4.2pc in the 12 months to August - while in the North West and Yorkshire and the Humber they increased at faster rates of 4.7pc and 4.8pc respectively.
There are also fluctuations in regions across the UK. House prices in Scotland fell 0.9pc over the year to £198,000, compared to a 5.6pc jump to £298,000 in England, an all-time high, the ONS said.
Prices in Wales nudged up 0.8pc to £174,000, and values in Northern Ireland rose 2.9pc to £151,000.
While London is still home to the most expensive property, with prices of £522,000 on average, values are slightly down compared with July, the ONS said.
Adam Challis, head of residential research at JLL, said buyers are feeling confident they are buying into a market where property prices aren't going to suddenly fall.
"There is more confidence in the property market, but affordability is worsening as prices grow at a faster pace than average wages. Low rates means it's a good time to take out a mortgage, but for the first-time buyer it remains the perennial challenge of finding the desposit of around 15 to 20pc needed to access the better mortgage rates."