The number of people taking their first step on to the housing ladder fell to a record low during August, figures showed today.

The National Association of Estate Agents (NAEA) said first-time buyers accounted for just 13 per cent of sales during the month, compared with a long-term average of 25 per cent.

The fall follows a slight recovery in the number of people buying their first home during July, with first-time buyers accounting for 17 per cent of sales, up from just 14 per cent in May.

The group called for the Government and lenders to take action to make it easier for people to get on to the property ladder.

President Melfyn Williams said: "While the market is not in recession, the acute shortage of first-time buyers is threatening to log-jam sales in progress higher up the value chain.

"Without first-time buyers the market could falter due to large chains of agreed deals being unable to complete."

Lenders were being over-cautious in the amount they would let people borrow, sticking to traditional lending multiples despite interest rates being at their lowest level for more than 50 years.

He added they should also introduce more products designed to help people get on to the housing ladder, such as guarantor mortgages, under which people could borrow higher income multiples if their parents were willing to act as guarantors.

Mr Williams said: "The Government should abolish stamp duty for first-timers. It is a totally inequitable and unjustifiable tax on home ownership."

The NAEA said annual house price inflation continued to fall during August, with prices just 6.9 per cent higher than they had been in the same month of 2002, compared with an annual rate of house price growth of 18 per cent in January.

It said it was also now taking an average of 17 viewings to sell a house compared with 15.7 the previous month, while people were getting 95.6 per cent of their asking price, down from 96.6 per cent in July.

Monday September 22, 2003