Savings of £20,000 are the key to getting on the first rung of the housing ladder, most first-timers believe.

But that and the plunging economy have not deterred buyers, with over half saying they still think renting a property is a waste of money.

According to a survey by the Co-operative Bank and Places for People, a fifth are optimistic that prices will rise over the long-term, while 30% believe a property should be a home and not an investment.

And although half said they had had to lower their expectations, most said they would not compromise on room size or location and three quarters felt the same way about a garden.

The proportion of first-time buyers making sacrifices in order to get on to the property ladder has increased sharply during the past year, with just 9% of people now saying they were not prepared to compromise their lifestyle in order to buy a home, down from 57% 12 months ago.

Half of people said they were forgoing eating out and having holidays abroad in order to become homeowners, double the figure last year, while four out of 10 are also buying fewer new clothes, cutting down on buying coffee and lunch from shops and reducing their alcohol consumption.

One in five people are making more drastic lifestyle decisions, such as delaying having children or getting married in order to buy their own home, while 11% have taken on an extra job.

Just half of first-time buyers said they thought the Government should do more to help people buy their first home, with only a quarter thinking the onus should be completely on them, while 19% thought the private sector should offer increased help.

Victoria Drummond, operations manager for Ownhome, the shared equity scheme run by The Co-operative Bank and Places for People, said: "This new research shows that the dream of owning a home is now out of reach for many first-time buyers, as they struggle to save for a deposit, against a backdrop of soaring household bills and the increased cost of living."

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