The number of first-time buyers (FTBs) entering the UK market in June has slumped.
New figures from the Council of Mortgage Lenders (CML) show that just 35,600 FTBs purchased a property in June 2007.
This is a huge drop from the 39,800 recorded in June 2006 and is the lowest figure recorded for June since 2004.
Rising interest rates are thought to be largely to blame as affordability continues to fall.
The base rate currently sits at 5.75 per cent and this is putting FTBs off from entering a volatile market.
According to the CML, the average FTB now needs to spend 3.37 times their income in order to get onto the property ladder, up from 3.36 times in May and 3.22 times in June 2006.
This is all bad news for homeowners. Fewer buyers entering the market means it is even more difficult to make a quick property sale.
First time buyer in UK market