House prices in Wales have outstripped income according to the report

National Savings and Investments (NS&I) said rising house prices meant new buyers typically take four-and-a-half years to save a 5% deposit on a home.

It said the average price first-time buyers paid rose by 7.8% in Wales in 2005 compared to a UK average of 6.5%.

A typical first home rose from �115,000 in 2004 to �124,000 in 2005, it said

The report by the savings and investment body said the income of a typical first time buyer had risen by only 3.2%, while Wales enjoyed particularly strong growth in property prices over the year.

It said the time taken for first-time buyers to save a 5% deposit was six months longer than a year ago.

Dax Harkins, senior savings strategist at National Savings and Investments, said: "The deposit for the average first time property in Wales is now just over �6,000.

"As house prices have continued to outstrip both savings rates and incomes, potential first time buyers need to start saving sooner and harder to get into the market."

Savings account

In comparison, NS&I said a typical house in Wales in 1994 cost �39,952, and the time needed to save a �1,998 deposit for it was two-and-a-half years.

The 2005 report assumed first-time buyers save 5% of their income in an interest-paying savings account.

It found new buyers in Northern Ireland needed to save for the shortest time of four years.

The national average time it takes first-time buyers to save a deposit was four years and nine months - the same for new buyers in London.