First-time buyers under-estimate house prices

Three-quarters of first-time buyers hope to spend less than the going rate for a first house, according to a new survey.

Alliance & Leicester Mortgages' quarterly movingimproving index found that 1.3 million potential first-time buyers intend to pay less than the average price for a first home.

However, some 15 per cent plan to spend in excess of the national average house price, which currently stands at £184,152.

Stephen Leonard, director of mortgages at Alliance & Leicester, said: "Our survey reveals that most first time buyers are pragmatic about the amount of money they can afford for their first home.

"With the majority choosing to look at houses below the UK national average, affordability is first and foremost in their thoughts. First time buyers are in a good position to take advantage of the positive moves lenders are taking to ease their financial burden."

It also appears that parents are increasingly providing an opportunity for young people to save, with one in four choosing to remain in the family home during their 20s.

And it seems British men are adopting the ways of their Italian counterparts ? they are twice as likely to live at home in their 20s than women, the survey reveals.

For more information on Mortgages for First Time Buyers click here