The average age of first time buyers is set to drop, with those in their 20s expected to dominate the property market over the next couple of years, according to figures released today.

Despite increasing student debt, low earnings and having to scrape together a large deposit, those in their 20s are the most buoyant about buying a property, according to Alliance and Leicester.

One in five (20%) people aged 20-29 are still hoping to buy a property within the next two years, the highest for any age group.

The average first time buyer is currently aged 34, but this will drop dramatically, the Alliance and Leicester predicts.

Older homebuyers are less confident with only 6% in their 50s and 2% in their 60s planning to move within the next two years.

Paul Cooper, head of mortgages at Alliance and Leicester, said: ''It is encouraging to see that the housing market can expect some new blood within the next two years.

''Most commentators believe that interest rates have peaked, with the base rate levelling out and slowly falling in the next few years, so first time buyers can look forward to even more competitively priced mortgages.

''This is encouraging and I look forward to some new verve in the housing market.''

Homebuyers are still cautious with overall intentions to move in the next two years dropping from 12% this time last year to 10% this quarter.

People in the North, East Anglia and London are the most likely to be planning a move within the next two years, at 14%, 13% and 12% respectively.

The need for more bedrooms is also the main reason for women, married people and Londoners. More than a fifth (23%) of women, nearly one in three (29%) of married people and 40% of Londoners wanted to move for this reason.

Nearly one in five (17%) recognised that buying can be cheaper than renting.

Overall, more than one in five people (21%) cite the need for independence/wanting their own place as their top reason for moving.

Independence was also the main reason to move for men, single people and the Welsh. A quarter of men, nearly half (44%) of single people and over a third (35%) of the Welsh wanted to move for this reason.

One in five people wanted to upgrade their homes and cited wanting more bedrooms as their top reason to move.

About 12% of homeowners wanted to move to make money on their property, compared to autumn last year when 11% of people wanted to move for this reason.

With house prices up by more than 10% in 2004 alone, property investors still seem positive about making money on their houses, the survey said.

For the Alliance and Leicester Movingimproving (correct) Index, RSGB Omnibus interviewed 3,850 adults nationwide between September and October.