Prospective first-time buyers considering taking out a 110 per cent mortgage in order to get on to the property ladder have been warned that they risk getting further into debt.

Rising house prices have increased the problems of affordability being faced by homebuyers and therefore made such mortgages more popular, according to Baronworth Investment Services.

However, while buyers taking out 110 per cent deals are usually young professionals who are confident of securing a pay rise over the next few years, should the housing market crash, they are more likely to get into further debt through negative equity.

"The first thing to do if one is getting into debt with mortgages is not to put your head in the sand," Michael Brill, the firm's director advised.

"You should contact the lender tell them what happened and see if they can find some way out of it that is amicable for everybody."

The comments come as the latest report from Hometrack revealed that house prices increased at the slowest pace since January 2006 in July, with many experts citing the effect of rising interest rates.