First time buyers must raise £20k

you're kidding! I think the only 20somethings I know who have that sort of money are either being given it by mater and pater because they're guilty about leaving them with a nanny or they work in the oldest profession in the world...
I think things like this are going to have a serious knock on for the building market.

£20k Deposit?

I think that this is the media oversensationalsing something again. You will need somewhere around half of that, I think - even for a 95% mortgage.

However, even £10k can be difficult to put your hands on immediately...particularly when renting is not very cheap either, thuis making it difficult to save.

The other difficulty for first time buyers is that the market for that type of house (smallish, maybe two bedroom semi/appartment) is always going to be buoyant as the demand for such properties is always high. As such, even when the market is on a downward trend, the prices of these houses don't move very much at all...so they remain excessively expensive for any couple who are not on very much above average salaries.

It's always interesting to see how real estate is always out of reach for so many, and wonder why it has become such a exclusive thing to own outright, while there is a industry and governments feeding from the basic need of owing a home we all suffer.

I'm wondering whether to give up on the idea of paying off a mortgage and just renting. While I understand the desire and need to own your own property it does come with an awful lot of heartache and headache. Renting forever is starting to look a lot easier. Renting versus owning. What do you think?

I suppose it depends what you are looking for in a home. I love my house so much I have nightmares that we have sold it and will never ever get it back and I wake up feeling very sad! My home is really central to my life and I love to decorate it and change it. If I was renting I wouldn't have any surety. However, it is costing us nearly a third of our income at the moment, partly because we have borrowed against it for improvements over the years. If we hadn't we would be paying a lot less then rent. It is a very personal decision - do what feels right for you and your budget, but also think long term.

Along those lines there are many adverts for cheap homes, that turn out to be 'park homes' i.e. mobile homes.
Whatever the preferences of a person, it can provide cheap accommodation. However many potential buyers do not realise the regulation of the park, that homes can be only of a maximum age - often 12 years - to remain on the park. As most parks have the same rules, there is no market for second-hand trailers of that age - just a big bill to get rid of them.

Georginazn, I know what you mean. I completely love my house (although wouldn't mind moving it somewhere else!) and know that it would be quite depressing living somewhere where you're not allowed to change it enormously by building things/changing the garden, etc, but paying my mortgage off seems a long long way away at the moment and I do just wonder whether all this trying to achieve a paid off house is worth the penny pinching we all have to do along the way. That said though, I seem to be assuming that renting is much cheaper and it probably isn't. I haven't really looked into that much but why should it be?

It is important to compare like with like. Renting and purchase is not comparable. Renting is like staying in a hotel room - it will never be yours, you cannot ever change much about it.
More importantly, the rent will never stop; mortgage payments will stop when the purchase price is paid off.

This seems to be what is hindering the market at present. FTB are finding it hard to get mortgages without big deposits. With smaller deposits the rates are much increased for them afraid. This was a slightly different product which we wrote about - Innovative 95% mortgage from Lloyds TSB