FTBs forced to borrow to fund deposits

This is a cause for concern for the government and borrowers alike as high house prices combined with a lack of planning could saddle borrowers with very high repayments.

Annabel Brodie Smith, communications director of the AITC, said: "Buying property is a huge financial commitment. If you can put down a large deposit then you can either afford a larger property or negotiate a better mortgage deal with cheaper repayments. First time buyers often do not understand how the extra bills can mount up – council tax, utilities, life assurance, buildings and contents insurance – it goes on and on. Why saddle yourself with more debt when, with a bit of thought, you could avoid it?"

Research from the AITC found that 15 per cent of all adults in the UK have buying their first house as an immediate priority, and this figure rises to 24 per cent among 25-34 year olds. If a bank loan is unavailable 38 per cent of 16-34 year olds would ask their parents for the money.

Annabel Brodie Smith said: "Parents beware! As a better alternative to the bank manager, the pressure could be on to produce large lump sums out of thin air. If you think this is something you would like to help your children with then it is easy to start saving for the long-term with an investment trust regular savings scheme.

"Investment trusts are owned by shareholders and governed by independent Boards. They have strong long-term returns, low charges and enable an investor to spread their investment risk. They also have low entry levels and you can invest in an investment trust from as little as £25 a month or £250 lump sum.

"If you had invested £50 a month in the average global growth investment trust over the last ten years your investment would now have grown to £8,686. However, if you had persevered and invested the same amount in the average global growth trust for fifteen years your investment would have increased to an impressive £19,466. Although there is no guarantee that past performance will be repeated this compares favourably with a high interest saving account where £50 a month invested over ten years would have grown to £7,382 and over fifteen years to just £13,298."