SOARING house prices mean the region is among those in the UK with the lowest number of first-time buyers, research has shown.

A survey by Sainsbury's Bank found that only 4.5 per cent of the country's first-time buyers were from the region, compared with eight per cent in London.

The findings came as the Council of mortgage Lenders (CML) last night predicted that interest rates would rise to 5.25 per cent by the end of the year.

CML director-general Michael Coogan said he was not expecting a housing market crash, but rather a slowdown as interest rates crept higher.

Sainsbury's research also showed that nationally, first-time buyers have collectively borrowed £1.36m from family and friends in the past two years to get a foot on the property ladder.

But nearly a third of the 881,000 people who bought their first property during that period admitted they had no intention of repaying the money. Friends and family helped with an average of £1,552 loaned to first-time buyers to help them set up home, while more than 26,000 were loaned between £20,000 and £40,000 by relatives and pals, the survey found.

While in the past, first-time buyers could claim their reluctance to repay debts was down to youthful inexperience - that excuse no longer stands up, with the average age of the first-time homeowner rising to 36.

Despite having among the highest property prices in Britain, the South-East had the highest number of first-time buyers in the past two years, making up 16 per cent of the UK total.

Yorkshire and Humberside (13 per cent), meanwhile, had the second and highest concentration of first-time homeowners.

Robert O'May, home insurance manager at Sainsbury's Bank, said booming house prices were forcing increasing numbers of first-time buyers to turn to their family and friends for help.

He said: "First-time buyers now represent around 30 per cent of overall mortgage lending, which is down from 51 per cent in 1991.

"If house prices continue to rise, the pressure on parents to help their children on to the property ladder will grow."

Sainsbury's Bank predicts that £3.98bn of property in the North-East is likely to change hands by September 2004, as five per cent of homeowners in the region plan to move - up four per cent from last year.

The North-East is expected to see the greatest increase in moving, Sainsbury's predicted.