'We bought and are now paying the price'

PR consultant Joanna Dalgleish and her boyfriend bought a twobedroom flat in Muswell Hill last February for £199,000.

They had been renting a similar flat nearby for £1,000 per month and thought owning a property would work out cheaper.

However, to her surprise, they are now paying £165 a month more in mortgage repayments than they were in rent. To add insult to injury, the landlord of their old flat has recently had to lower the rent to £850 a month to attract tenants.

Joanna, 26, said: "We were planning to go to Australia on holiday but have had to cancel and we haven't been able to furnish our new flat properly. I can't buy any new clothes or clear any of my debts, which I thought would be possible once I became a home owner."

Despite a combined income of £65,000, Joanna says they struggled to find a lender willing to give them a mortgage. And the lack of properties suitable for firsttime buyers in their price range meant they had to overstretch their finances. "I know we will get something back eventually, but we're worried that prices are going to go down," she said.