Poor Graduates

Two-thirds of graduates under 30 do not own their own home, Scottish Widows Bank found, and a fifth said it could be 10 years before they can afford one.

Of those graduates who do not own a home, two-thirds reckon current house prices are still unaffordable.

However, this was an improvement on last year, when nine out of 10 graduates said prices were too high.

The survey interviewed nearly 1,500 graduates aged between 21 and 35.

Debt barrier

Since the summer of 2004, property surveys have indicated that the rate of increase in UK house prices has been slowing, although there have been signs in the past couple of months that activity is picking up again.

The slowdown has improved the outlook for graduates, Scottish Widows Bank said - although it added the picture was still "bleak".

Buying your first home can be a daunting experience

Duncan Pownall, Bradford & Bingley

A first-timers guide to buying a home

The bank's survey found that 44% of graduates thought that the burden of paying off student debts and loans was the greatest barrier to buying a house - down from 55% last year.

Almost one in 10 graduates said they would not have gone to university if they had known the problems student debt would create in trying to buy a property.

However, the study found that half of graduates welcomed the government's move to raise the threshold at which stamp duty starts being paid from £60,000 to £120,000.

It also found that 58% said the government's Homebuy scheme would help them buy a property.

Of those graduates who had bought a home, nearly four in 10 had done so only because of a gift or a loan from family or friends.

"Not everyone can rely on friends and family to help them buy their first house and there is a real need for more assistance from both lenders and the government when it comes to first-time buyers," said Murdo McHardy of Scottish Widows Bank.

"While the results of our survey make this as apparent as ever, there are definite signs of more optimism this year," he added.