Are first time buyers older because their grandmothers live longer?

You'd think that with house prices falling in both nominal and real terms and with incomes rising in nominal terms at least, things would be slowly getting easier for first time buyers. But they aren't. The Royal Bank of Scotland's ability-to-buy index shows things getting worse rather than better.

The index, which measures the effects of tax, earnings and living costs as well as house prices and interest rates has risen from 96.5 three years ago to 98.6 now. The higher the index the harder it is to buy a home.

So why, even as the house price to earnings ratio is coming down and when interest rates and mortgage rates are still near record lows, is this index going up?

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It is largely about the deposit. In the final years of Britain's great property bubble, deposits weren't necessary indeed, having one was considered to be weirdly risk-averse. These days, they are considered absolutely vital. All the best loans go to those with high deposits and no loans at all go to those with no deposits.

But the inflationary squeeze on real incomes has made it hard for the young to save enough to get anywhere near the amount needed to buy the average home. If house prices stayed completely flat and if the average would be first time buyer was by some miracle able to save 30% of his discretionary income, it would still take over three years for him to save the average 10% deposit.

But if you stop to think about this, barring the bubble, it has always been hard for first time buyers to raise deposits. Saving £20,000 (or the equivalent of £20,000 or so) from the kind of salaries of the under 30scan't have been easy even 30 years ago when real incomes were actually rising.

Might something else account for the fall in the number of and the rising age of first time buyers? In the 1960s the average first time buyer was 23. In 1980 he was around 30. Now he is 36, six years older.

But look at the demographic changes that have accompanied that huge shift. First has been the rising life expectancy of the would-be buyer's grandparents. Female life expectancy in 1980 was 76. Now it is 82. So people wait for their inheritance (and hence their deposit), on average, for six years longer than they did. That might be making a difference.

Another change that can't be dismissed from the equation is the age at which women have their first child. In 1985 it was 25. Now it is 29 (it is harder to track the age at which men have their first child but it is around 32). That might be making a difference too: nothing spurs people into action faster when it comes to saving or begging the cash for a deposit than the need to nest a nursery for their first born.