THE talk of housing market slumps and interest rate rises can make it seem that anyone getting on the property ladder now can no longer hope to see their property soar in value. So should aspiring homeowners just give up?

There is certainly a case for delaying until you are 100 per cent ready. Graduates who are feeling despondent about ever owning their own home should take heart; anyone buying in their early 20s is well ahead of the curve – the average age of a first-time buyer is now 28, according to Lloyds TSB.

While average mortgage costs have increased to 32.5 per cent of total income for first-time buyers, the cost of renting has remained static, or fallen. Average rent costs take up 20.5 per cent of income, except in London where the proportion rises to 25.5 per cent, says Hometrack, the housing market analyst.

Renting does mean that you do not have the benefit of owning an asset, but it is the more appropriate option if you need short-term liquidity rather than a long-term retirement pot.

For lessons in why it might be a good idea to wait, look at your predecessors who got on the property ladder between 2003 and 2005. They took advantage of cheap fixed-rate mortgages when average interest rates were between 3.5 and 4.75 per cent. However, they are reaching the end of their deals just as the interest rate hits 5.75 per cent and so are facing repayment rises of hundreds of pounds a month. Higher prices and stricter borrowing rules mean that many will also find it difficult to trade up to bigger homes.

For instance, a borrower in 2005 who took out a 25-year term mortgage for £150,000 at a rate of 4.5 per cent, now remortgaging on to a rate of 6.18 per cent, will see monthly outgoings rise from £833.75 to £973.60 – although he or she will have paid off £6,500 from the loan, reducing the balance to £143,585. A pay rise of about £3,000 a year will be needed to cover the increase comfortably.

Trevor Williams, chief economist at Lloyds TSB, says: “In the short-term, there is an argument to continue renting, as rental yields have fallen, meaning it is not getting more expensive.”

The Government says that first-time buyers should take out long-term fixed rate deals lasting ten years so that they know exactly what their monthly repayments will be.

But Melanie Bien, of Savills Private Finance, the broker, says: “If you know that you will stay in the property for several years, then consider taking a longer fix of more than two years. But don’t do so if you will want to move, or you’ll have to pay to get out of the mortgage.”

She also advises steering clear of variable deals and mortgages for 100 per cent, or more, of the property’s value as you could be at risk of interest-rate rises or negative equity.