Tightening of lending means that first time buyers are still locked out of home ownership despite the fall in house prices, new research by Shelter's ROOF magazine has shown.

Figures from the annual ROOF Affordability Index, seen as the most comprehensive yearly data on house affordability, show the average house price for first timers is now £124,699, almost £30,000 lower than last year.

But this improvement in affordability is more than offset by a doubling of the size of the deposit required by lenders.

In September 2007 the average deposit required by lenders was £13,194. However, by January 2009, that figure has more than doubled to £30,632.

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The lack of accessible mortgages was not the only factor holding first time buyers back from entering the market. Rising repossessions, unemployment, economic uncertainty, and the expectation that house prices may fall further are all having an impact. As a result, in 2007 the number of first-timer loans was 358,000, but this fell to just 194,000 a year later.

Shelter Chief Executive Adam Sampson said: "These new figures show that the housing market is far from bouncing back. Although house prices are now lower than they have been since 2005, in practice the majority of first time buyers are no closer to being able to buy their first home.

"The fact that most banks and building societies are reluctant to lend to anyone without a massive deposit means there is a generation of young people and young families being locked out of the housing market."

Overall mortgage lending has substantially reduced since the onslaught of the credit crunch with fewer deals available and most lenders demanding much larger deposits. It is only in recent days that HSBC has been the first major lender to offer a more competitive rate for those with a 10% deposit.

(CD/JM)