FIRST-TIME buyers are finding it tough to get a foothold on the local housing ladder after unprecedented rises in the first half of last year sent prices through the roof.

Young people and couples are struggling to secure funds as the average price of a terraced home now tips the £80,000 mark.

But after a lull in buyers entering the market in the second half of last year estate agents say there are encouraging signs of renewed interest. And one St Helens firm, Hyland Estate Agents, shed a ray of optimism in saying: "We know it has been tough, especially for first-time buyers, in the recent past. But much of the overheating has gone out of the housing market recently. Prices have stabilised, and in some cases fallen back, so there was never a better time to seek out a good deal."

Competition between investment buyers in 2003 and the first half of 2004 had caused prices to rocket.

Some borrowers say single people looking to secure their first home are likely to need to be earning around £25,000 a year to be able to afford to buy. Prices have soared so much that is also proving tough for couples to buy their 'starter home'.

Several estate agents in St Helens say the number of first-time buyers dwindled in the second half of last year after interest rates rose, and led to the market slowing down. However, since mid January more first-time buyers have returned to the market. But the high prices have led to fears that some are overstretching themselves.

Paul Price, managing partner at Halifax Estate Agents in St Helens, said: "Demand for terraces is improving by the week. We are doing an awful lot more mortgage promises for first-time buyers.

"But to buy an average terrace house now costs £85,000, occasionally one might come available in some areas or one that needs a bit of work doing. They may cost £69,950 or £75,000. There's no doubt it is proving hard for single first-time buyers and they need to be careful they don't overstretch themselves."

Meanwhile, Claire McLoughlin, branch manager at Beresford Adams in St Helens, is confident homes remain affordable, saying: "We'd encourage people to come into the branch and chat to staff and financial consultants so they have an idea of what monthly costs are.

"We've had some good reductions on terraces and though prices are quite high, they're not out of reach of first-time buyers. People can borrow as long as they have no bad debt and can raise the deposit."

Figures from the land registry show the average price of a terraced home in St Helens in December stood at £82,849 slightly higher than £81,143 in Merseyside overall and bigger than the £77,268 quoted in Liverpool.

Terraced prices in St Helens rose 2.3 per cent in the quarter (ending Dec 2004). That's an annual increase of 38.1per cent.

In the same period, semi-detached average prices were £119,101, down 2.6per cent with annual rise of 24.8per cent.

The average price of a detached house is £196,284, down 1.6per cent in the quarter to December, 2004 and up 8.5 per cent annually.

The average price of a house in St Helens is £113,007, down 2.5 per cent in the last quarter, but up 23 per cent annually.