Do the sums still add up?

House prices have almost tripled since 1995, yet mortgage lenders are, in most cases, holding the line on how much they will lend to first-time buyers. Is now the time to loosen the strings, accepting that low inflation and interest rates are here to stay, or would it be disastrous?

For the past 20 years, the standard lending limit has been hovering at 3.5 times a single salary or 2.75 times joint. Today, this means that a single first-time buyer would have to earn more than £37,000 a year to qualify for a mortgage on an average property - currently worth £130,473 according to Nationwide. But government figures put the average UK salary at just £24,603.

In a different interest rate environment, this might be a straightforward case of hard cheese. But the vast majority of today's average earners can afford to service mortgage repayments on a standard-value home, given interest rates at 50-year lows.

Many would-be buyers are paying rent equal to, or even in excess of, what they could be paying on a mortgage.

Paul Banfield, partner at financial advisers, Best Advice, says: "How can it be sensible that the same income multiples apply to a base rate of 15% in 1989 and to the current base rate of 3.5%?"

For some people there is some flexibility. But it largely benefits those who have wealthy parents who can help with deposits. Lenders will offer bigger loans, or ignore traditional lending limits, if you can stump up big deposits. "Nationwide, for example, has announced that for lending under 75% Loan to Value, a borrower does not have to declare their income at all," says Mr Banfield.

A high income and clean credit rating will also allow you. In April this year, Halifax altered its income multiples to 5.23 times single salary for a borrower earning more than £32,501. However, this is only in conjunction with a squeaky-clean credit score, a large deposit, and on the condition that they take a five-year fixed rate.

Abbey also will offer five times single income to borrowers with a minimum salary of £35,000, using equally stringent criteria.

But the lenders are the first to admit these are not typical circumstances for a first-time buyer. Others - such as Standard Life Bank - use affordability measures to dictate borrowing levels. It's an approach that can make far more sense, says spokesperson Angus Macleod: "You might have two 40-year-old men on exactly the same salary," he says. "One has been divorced and has financial commitments to his family as well as credit cards and loans. The other is single and has no debts. The latter will obviously be able to put a larger proportion of his salary into his mortgage and will, in turn, be lent more."

The result is that, although Standard Life does not advertise income multiples of four or five times salary, lending can often fall into that arena. However, the bank's "stress testing" policy requires all affordability calculations to be based on an assumed interest rate of 10%-6% higher than current medium-term fixed rates. So despite these developments, for first-time buyers with small deposits and average incomes, restrictive income multiples still essentially apply.

So is it the right time to raise them across the board?

Not according to the Citizen's Advice Bureaux, that issued a consumer debt warning last month. Spokesperson, Moira Haynes says: "First-time buyers pushing themselves to the limit should do so with caution. Not only must they consider interest rate rises but they should also prepare for a potential drop in earnings and hike in expenses - by having a baby, for example."

Even mortgage brokers agree that raising current income multiples with a broad brush is not the answer.

"Instead, they should be scrapped and a universal affordability process applied. Every outgoing is taken into account and mortgage repayments calculated on the average interest rate over the past 10 years," says Mr Banfield.

The fact that the CAB has seen more than a million new debt cases nationwide over the past year - 70% of which are related to consumer debt such as credit and store cards - gives even more credence to lenders focusing on monthly outgoings rather than annual salaries.

"It would only take a 10% drop in income to push people over the edge," warns Haynes.

Case study: Caught in ?900-a-month rent trap

Art consultant Angie Davey, 27, and her partner Alex Nicholas, a 26-year-old graphic designer, are renting in Greenwich, south-east London, having been priced out of the area's housing market. "With the £900-a-month we pay in rent, we could afford to be paying the mortgage on our flat," says Angie. But even with a joint income of £50,000 the couple can't yet afford to buy.

"Our joint salaries appear to be quite high," says Angie, "but without a deposit, the maximum we will be able to borrow is around £137,000."

The average house price for Greenwich is just under £300,000, according to Land Registry figures and even to buy a flat would set Angie and Alex back an average of £175,000. "We could move further out but Greenwich is so convenient to get into central London for work and I feel safe and at home here," says Angie. "We will just sit tight, continue saving and hope that prices come down."