Lenders have been reporting signs of increased first-time buyer activity this year, although the latest figures from the Council of Mortgage Lenders (CML) show that the number of loans advanced to this sector dropped back slightly in April.
Halifax's Generation Rent report also pointed to figures from the CML, showing that first-time buyers still needed to find a deposit of nearly £27,000 typically in the first quarter of this year.
Halifax found that almost one-third (31 per cent) of 20 to 45-year-olds said they would only be prepared to save for three years to raise enough cash for a deposit before giving up.
According to financial information website Moneyfacts, the proportion of mortgages on the market for people with a deposit of 5 per cent-10 per cent has remained static compared with a year ago and almost half of mortgages are still aimed at people with a deposit of 25 per cent-40 per cent.
The increased demand in the rental sector from people who have struggled to buy a home has prompted strong increases in rents, increasing the pressure on people who are trapped there.
Calls have been made for greater stability to be placed into rental contracts to help give families more certainty over issues such as rent rises and the length of a tenancy.
Craig McKinlay, mortgages director at Halifax, said: "Home ownership is clearly still an important goal for a lot of people, but fewer and fewer people consider it to be something they'll ever achieve.
"More needs to be done to redress the balance, both through making home ownership more accessible and offering more stability through the rental sector."
Housing Minister Mark Prisk said: "The number of first time buyers is at its highest level since 2007, but we are always looking for new ways to help hard working people make their dream of home ownership a reality and offer valuable alternatives to the bank of mum and dad to get together that much-needed deposit."
