Uncertainty remains in the UK housing market

But 26% of potential buyers surveyed at the end of 2012 believe that they can raise a deposit in three years or less. This is in stark comparison to the 69% who said they did this before the start of the credit crunch in 2008.

Paul Broadhead, BSA head of mortgage policy, said: "Buyers and lenders alike are adjusting to a new kind of normal in the UK housing market and the headwinds generated by a weak economic environment mean that it is here to stay right now.

“It is, however, a complete myth that no first time buyers are getting their feet onto the housing ladder. Between January and October 2012, building societies and other mutual lenders helped 22,000 more first timers buy their own home than in the same period last year, with around one in every three mortgages made to this group. Mutual lenders have contributed most of the net lending in the UK this year as some banks have shrunk their balance sheets.”

Since September 2010 raising a deposit has consistently been the biggest barrier to property ownership right across the spectrum of homebuyers.

Looking ahead to 2013, nearly a third of first-time buyers are pessimistic about their chances, believing that things will only get harder next year.

Most are reliant solely on their own savings, rather than the bank of mum and dad, to raise a deposit. Below inflation wage rises, higher rents and the increasing cost of living are all making saving harder.

Although deposits are plainly still an issue, access to mortgage finance has eased with less then half of the public (45%) now saying that it is a barrier to property purchase - the lowest since the BSA started tracking consumer views on home purchase in 2008.

Looking ahead to 2013, amongst those planning to buy for the first time in the future, 23% said that they believed they would be living in a property that they owned by the end of the year, whereas 73% said they would still be renting or living with family or friends.

Since the credit crunch owner occupation has been falling in the UK, down from 14.7 million to 14.5 million households between 2007 and 2011. This is backed up by 2011 Census data released last week.

Broadhead added: "There is no doubt that sensible creativity will be required from all of those involved in the mortgage market. There is potential to grow and develop alternative forms of tenure for the future, although simplicity and transparency for the consumer must be at the core of any such developments. In addition, it would be helpful if government and regulators could decide their priority between the 'lend and lend now' rhetoric and the demands to grow capital - lenders can't do both."