Rising interest rates is a phrase that strikes fear into the hearts of first-time buyers, many of whom have confessed to having a new obsession with European Central Bank reports.

The annual Housing Statistics Bulletin published last week by the Department of the Environment confirmed that although house prices are still rising, the rate of growth is slowing down. The news will no doubt be greeted by sighs of relief all round but first-time buyers still have a whole array of worries to occupy them. Rising interest rates, the shortage of new housing coming on the market, stamp duty, the issue of social housing in new developments, and the likelihood of a property crash are some of the worries voiced by young buyers as they try to secure a firm footing in the property market. First-time buyers Alex Heaslip and Alison Cleary are IT professionals in their mid-20s living and working in Dublin, and have recently purchased a three-bedroom semi-detached house in Cork. Their new home is part of the second phase of a new development, Dun Eoin, in Carrigaline, Co Cork, which they bought in January of this year for £123,000.

"Although we are both currently working and living in Dublin we decided to buy in Cork because Dublin was out of our league financially. We didn't want to wait any longer before getting into the housing market due to the steady increase in prices so we bought where we could afford to buy. We are from Cork and always intended to move back.

"We presumed we would be able to buy at around the £100,000 mark but found that nothing in that price range was suitable as they either required a huge amount of work or else were too far outside the city. We decided to buy now because house prices seem to be increasing continuously and we were afraid that they would soon be unaffordable for us.

"Stamp duty on a second-hand house is another major expense, so we went for a new development. We are very happy that we finally have our own home but are terrified of increasing interest rates and a drop in house prices."

Twenty-seven-year-old Laura McSwiney purchased a new house in Swords in north Co Dublin last July. Originally from the south side of the city, Laura bought the three-bedroom property at Ridgewood Close with her younger sister. Both girls work in the city centre.

This time last year, Laura McSwiney was renting a property in Donnybrook with friends and had not considered the option of buying. Last summer she decided to start looking for a property and by July she had the papers signed on her new home.

"I looked in all areas from Bray to Swords. Ideally I would have bought a house closer to my parents' home in Foxrock, but with a budget of £130,000, it had to be further out of the city.

"We went to see a showhouse and it was in line with what I wanted. It was a new development and although the first-time buyers grant is worth very little, we were always going to go for new development as stamp duty is a big consideration. Overall, the whole process went very smoothly. I had not expected the paperwork, and the hassle of trying to organise mortgage, downpayment and chasing solicitors.

"My big concern was questioning if I had made the right decision, `what if interest rates go up, can I still afford the repayments?' It is quite daunting, but having two salaries definitely made a big difference."

She doesn't view her house as a long-term home, although she would like to hold on to the property as an investment when she moves on. Constantly rising house prices were a big factor in the timing of Laura's decision. "Prices were going up, not going down and we decided to jump on the ladder before they went up any more. The big fear is that interest rates will rise: they are, after all, at an all time low, so it's inevitable."

Mary Crowe is in her late 20s and has spent the last six months searching for a house. An analyst programmer from Limerick, Mary went looking for a suitable first-time buyer's home in Dublin last October.

"By then I had the deposit saved and have been looking in all areas, mostly within a three mile radius of the city centre like Stoneybatter, East Wall, Crumlin, but also in Blanchardstown and Donaghmede.

"Initially my budget was £120,000, but most of the properties I've seen in that range need too much work done. So now I'm willing to pay £160,000. New developments in areas like Lucan are often too far out and too far away from amenities. With older houses, you could see dampness developing and most require work, like replacing a kitchen which costs £7,000 to £8,000.

"I put in a bid on a house in Blanchardstown, a three-bedroom semi-detached house at the brochure price of £153,000. When I went to view it, the price had increased to £155,000 and I stopped bidding at £160,000."

Although Mary Hayden has a permanent nursing job in Tallaght Hospital she will have to move away from Dublin to buy her first home: "Even with both wages it is still not feasible at the current rates. We just cannot afford anything in Dublin while having any sort of lifestyle."

Originally from Tipperary, Mary knows that she can buy or build a property in that area for less than three-quarters of the Dublin price: "A property that would cost £130,00 in Dublin can be bought for £70,000 elsewhere and you can still enjoy a decent standard of living. People have huge mortgages, and with inflation and interest rates, buying property is beyond the normal wage," she says.

"It annoys me that I can only dream about owning my own house in Dublin, all of my friends are here and my life is here, but I have to move to buy a home. I sit there with my friends at work as we look through the papers at the prices of properties and we laugh." Recently returned from a year of travelling around Asia, Gearoid Hanrahan is now living and working in Limerick. Since his return in February, he has been looking for a property to purchase. He is 26 years old, single and has a budget of between £100,000 to £120,000 to spend - which is quite considerable for Limerick.

Gearoid is limiting his search to the Raheen area to be close to amenities. While there is a good choice of two or three-year-old houses, he would prefer a house in a new development to avoid stamp duty. There is a new development due to come on stream in the Raheen area this autumn, but he feels this is too long to wait and points out that the prices haven't been released yet.

"Rising house prices in Ireland was a big media topic abroad, and prices have jumped by around 20 per cent in the year that I was travelling, I don't want to wait and see by how much they rise next year, otherwise I will be priced out of the market. I've done my travelling now, so I am planning on settling in Ireland for the long-term, and the current prices make my task of buying a home quite urgent.

"For returning emigrants house prices are a huge issue. For me the comparison is all the more blatant. Three years ago, three bedroom semi-detached houses in Limerick were £65,000. The same houses are now £110,000.

"Another problem is that banks and building societies only take your gross income into account rather than your actual ability to repay the mortgage. As a single person I have very little outgoings and a large disposable income, but the banks will only give me a mortgage based on my salary when in reality I can afford to repay a higher amount on a monthly basis.

"Another issue is social housing. If you are buying in a new development then I would want to check out the social housing policy scheme. I would be concerned if 20 per cent of housing in the new development were allocated to social housing. Does that mean that the other 80 per cent are being sold at a higher rate so the builder can cover profits of the lower costs of the 20 per cent?"