First-time buyers have been all but pushed out of the property market. The difference between home ownership and long-term tenancy is often a funding shortfall but this is increasingly being made up by parents or other relatives.

The price of most properties available to first-time buyers - around £90,000 to £100,000 (€114,000-€127,000) - means a salary of at least £30,000 is required to get on the first rung of the property ladder.

Although people in their late 20s have such a salary some financial institutions will allow for other sources of funding.

"In many cases, first-time buyers have to give far more than just the initial deposit because of the price of property and the absolute level of the mortgage," says Irish Mortgage Corporation's managing director, Mr Derek Maguire.

"Certainly there are a number of cases, mainly they're providing a cash deposit ranging from £5,000 to £30,000," says REA Mortgage Services consultant Ms Sarah Wellband.

Some parents pay the child's deposit, the extra expenses or both. Gift amounts average between £10,000 to £15,000 but at least one mortgage adviser has seen a £50,000 gift from parent to child.

"Either the child has insufficient savings or insufficient income. They don't have the time or patience and in this market there's no waiting around," says Ms Wellband.

It may be advisable for parents to give children an early inheritance as this is when they need it most. Parents are entitled to give their children up to £192,900 taxfree as an inheritance. Grandparents, siblings, aunts and uncles are entitled to give up to £25,720 taxfree.

All gifts since December 2nd, 1988 are added together to determine any inheritance tax liability. If it is a one-off gift, it is not liable to tax if it falls below the threshold amounts.

Financial institutions determine lending amounts based on the person's financial circumstances, including gifts or debts.

"The mortgage given by the lender is within the person's repayment capacity," says Mr Maguire. The addition of a large lump sum may reduce their mortgage amount or allow them to purchase a more expensive property.

"Most lenders require that parents write a letter that it is a gift rather than a loan to ensure the parent has no legal interest in the property," says Ms Wellband.

If it is perceived as a loan, the lender is unlikely to increase the mortgage as the person's ability to repay is reduced by this additional repayment burden.

If parents do not have that kind of extra cash laying around, a parental guarantee is another option. In effect, the parent guarantees repayment of a part of the borrowing if required.

The guarantor must have a repayment capacity. Even if a parent is retired, the institution may take their pension or property into account when determining eligibility.

Some lenders have parental guarantee forms available while other will accept a statement drawn up by the parent's solicitor and signed by the parents.

Under this contract, "maybe 1015 per cent of the borrowing is placed against the parent", says Mr Maguire.

If the child is unable to pay this amount, the responsibility falls to the parent for that percentage of the loan. The good news for parents is that this guarantee may be removed after a specified period. In the past, taking in a lodger was a sensible and cost effective way to offset mortgage repayments. Today, this practice has a potential downside for first-time buyers says Irish Mortgage Corporation's Mr Liam O'Connor.

"If it's a brand new property and they take in a lodger within the first five years they will have a tax liability on any rental profit they have and may be liable for the stamp duty that they did not pay at the start," he says.

Banks will take rental income into account when assessing a buyer's repayment ability. Unfortunately, if the rent is £400 a month the bank will assess almost half of that figure or at a 46 per cent tax liability. Banks base the calculation on approximately £200 a month as income. If a person has a salary of £30,000 the lender may add £2,400 (or £200 by 12 months) to increase the person's total income to £32,400, says Mr O'Connor.

Every institution operates their own system of assessment. For example, ACCBank will not take all of these options into account for a mortgage. "We'd be doubtful about the lodger because it's not a standard source of income," says market development manager Mr Denis Fahey.

The newest entrant to the market, Bank of Scotland will not consider either parental guarantees or lodgers when determining mortgage loan amounts.

There are other strategies if a first-time buyer is willing to do research. Although financial institutions do not advertise the fact, a few are lending three to three and a half times basic income based on the ability to repay. Contract employees, left out of the market in the past, may have more luck with building societies than the banks.

In this very competitive lending market, some banks are offering first-time buyers a discounted rate in year one, options to postpone payments for three months or a 10- or 11-month repayment schedule.

The relief from mortgage repayments during the initial term of the loan allows additional monies for furniture or other essentials.

Those with lower incomes may apply for the shared ownership scheme available from local authorities. To qualify, a household must have a maximum single income of £20,000 in the preceding tax year.

In the case of a two-income household two and half times the principal income plus once the secondary income must add up to less than £50,000 in the preceding tax year.

Under the scheme, a local authority buys the house for an eligible person, who must take out a mortgage through the authority, paying a minimum 40 per cent, maximum 75 per cent of the cost. The remaining share will be rented by the buyer from the authority.

Buyers must show the ability to repay and each local authority decides the maximum cost of the property.

A deposit of £1,000 is required as well as £1,500 for legal costs. No stamp duty is payable and the first-time buyer's grant of £3,000 applies for a new house. Tax relief may be claimed on the mortgage amount. After 25 years, the buyer must purchase the local authority's share.

Many first-time buyers have the money for a deposit but fail to think of all the extras. If you are buying a second-hand home, essential costs include: a deposit £5,000 to £10,000; stamp duty 3 per cent to £100,000, 4 per cent above that; bank/building society valuation of house £50£100; legal fees approximately £1,000; independent surveyor's fee, £150£200; title search fees £150; life insurance to repay loan in event of death approximately £160 per annum. An indemnity bond costing around £300 is sometimes waived.

If a first-time buyer can find an affordable new home to buy, the situation is much better in terms of extras.

A first-time buyer's grant is available, stamp duty is waived and a builder will provide a Homebond Guarantee which insures against problems with the house for 10 years.

It is worthwhile paying a professional surveyor, architect or builder to do the "snag list", which ensures that everything promised has been completed and done properly. "A strategy for someone starting off is that they should get as much savings together as they possibly can," says Mr O'Connor.

"With new developments, the properties are sold off the plans. If it's not ready for a year, year and a half it gives them time to get savings together."