First-time buyer couples on a low income now need to save 100 per cent of their joint earnings to enter the housing market, according to research from the Royal Institution of Chartered Surveyors (Rics).

According to the accessibility and affordability study released today by the organisation, those on lower quartile earnings (totalling £27,516 after taxes), now need to save their entire joint take home pay to build up the necessary funds.

In all first-time buyers need £27,738 for the up front buying costs on a typical home – including the deposit, fees and stamp duty.

This equates to a substantial rise from the low point of 21 per cent of income required in 1996, finds Rics.

The increase has largely been driven by lenders increasing the loan-to-value (LTV) ratio on products. As deposit levels have increase, thus would-be buyers are forced to save more.

“Access to the housing market has deteriorated as the credit crunch has taken hold of the mortgage lender sector,” said Rics senior economist, David Stubbs.

“With mortgage approvals declining, the picture does not look like improving in the latter part of 2008 and first-time buyers will find their path to home ownership increasingly blocked.”

However, for those with the funds available to secure a property, the picture is markedly rosier.

During the second quarter of 2008 a couple on lower quartile incomes had to spend 34.5 per cent of their combined take home pay on a mortgage – down from 37.2 per cent in the first quarter.

This is also significantly below the all time high of 46.5 per cent, recorded in the final quarter of 1989.

The improvement in affordability can be attributed to falling prices and tighter lending conditions, with smaller mortgages equating to smaller repayments in a time when interest rates are relatively low.

“Those who are able to access the housing market, will find that a bigger deposit will mean that mortgage repayments are reduced but with real incomes stagnating this will seem like light relief only,” added Mr Stubbs.

“Homeowners’ finances will continue to struggle with rising food and fuel costs making the burden of mortgage repayments even more difficult.”