First-time buyer numbers have fallen to the lowest level in almost three decades, research from Britain's largest mortgage lender shows.

An estimated 300,000 first-time buyers entered the housing market in 2007 — the lowest level since 1980, and 44 per cent less than in 2002, according to the Halifax.

Those vying to get a foothold on the housing ladder cannot afford to buy the average house in 96 per cent of towns across the United Kingdom, up from just 30 per cent five years ago, its fifth annual housing review shows.

Terraced property - traditionally the least expensive property type - was unaffordable in 71 per cent of towns, compared to just 11 per cent in 2002.

The review tracks housing affordability in 483 towns, including 32 London boroughs.

A town is classified as unaffordable if the ratio of house prices to first-time buyer household income is above four.

The average price paid by a first-time buyer rose 15 per cent to £175,093 in 2007, up by 82 per cent from £95,994 in 2002, the figures show.

Henley on Thames, where the average property price is 13.1 times the average income of a first-time buyer, was found to be the least affordable area.

Bootle in Merseyside was the most affordable town. Here, the average property price is just 3.4 times higher than the average first-time buyer's household income.

That was followed by Gosport in Hampshire and Lerwick on the Shetland Isles in Scotland, where house prices are 3.5 times the average first-time buyer's income.

Martin Ellis, chief economist at the Halifax, said rising property values had priced many potential first-time buyers out of the housing market.

"When they do enter the market, first-time buyers are now more likely to be in their 30s rather than their 20s, and buy a flat rather than a terraced house," he said.

No quick fix

Ellis said there was "no quick fix to the first-time buyer problem.

"A more subdued housing market over the next few years is a positive step for potential new entrants.

"Lower-than-average earnings house price growth together with more government initiatives may, in time, address the issue."

David Bexon, managing director of property website SmartNewHomes.com, said the report highlighted the need for government intervention.

"What we need now from the government is some action - proactive steps aimed at helping this vulnerable group on to the property ladder.

"Putting down the average 20 per cent deposit - more than full-time average earnings of 28,590 pounds in 2007 - is no longer a realistic option for many first-time buyers, many of whom will also be paying high levels of stamp duty."

The data is based on figures from the Halifax, the Council of Mortgage Lenders, National Statistics and the Department for Communities and Local Government.

- Reuters