First time buyers, beware. This is the clear message coming from the Council of Mortgage Lenders (CML), whose latest figures show just how frightening the financial pressures on first-time buyers have become. In November 2006, income multiples were a record-breaking 3.29 times higher than the average first-time buyer household income. This figure was 3.27 in October 2006, and 3.08 in the same month the previous year.

The figures also revealed that the proportion of income used to pay mortgages hit the record level of 17.8% in November 2006. This was up from 15.8% in November 2005. Furthermore, the number of first-time buyers paying stamp duty went from 48% in November 2005 to 57% in November 2006.

As if these pressures weren't enough to put you off house-buying, the Bank of England recently decided to raise interest rates by 0.25%, bringing them to 5.25% - the highest level since May 2001. With the average first-time buyer's mortgage now around £113,877, this increase in interest will add around £17 to monthly mortgage payments.

So have we all given up on the property ladder and decided to stick with renting? Quite the opposite, say the CML. The number of first-time buyers purchasing property is actually increasing. In November 2006 the number of loans to first-time buyers was 5% up from the previous month, reaching a total of 37,000 loans in the UK. It seems that first-time buyers are keener than ever to own their own little piece of the UK, but the CML have warned them to tread carefully.

The only sure-fire way to avoid the trials and tribulations of buying is not to buy at all. In which case, your main option is renting. It's something we don't seem too keen on in the UK, but it's a different story in many other countries. The table below shows figures from the UN Economic Commission for Europe on the balance of rented to owner-occupied households.

Figures from the Bulletin of Housing Statistics for Europe and North America 2006, UN Economic Commission for Europe

Patterns of tenancy are vulnerable to a complex set of cultural and economic factors. Like others, UK buyers have to weigh up often highly emotional personal pros and cons, as well as financial issues, in deciding whether and when to buy.

Abbey's 2006 Rent vs Buy Report showed that over a period of 25 years, homeowners in the UK were better off than renters by an average of £24, 372 (6%), roughly equivalent to a year's salary for most. If you buy a property, you'll be paying £379,341 over 25 years, as opposed to £403,713 if you rent.

Interestingly, however, the annual report is showing a narrowing of the gap between buying and renting, with recent house price inflation tipping the balance towards tenants. Regional figures showed that in some areas you're actually better off renting. In Wales, private tenants can save £27,416, or 8%, over a 25 year period. For buyers, the best savings are to be had in Scotland, where buying instead of renting saves you 20% (£81,157 in the East and £69,779 in the West).