The myth of the property ladder is simple. You buy a starter house, which you live in while you save for the home that you really want.

When the time comes to buy the dream home you have your savings, and your starter home has also gone up in value giving you a nice profit that you can put towards the new house.

Sounds great, and there's just enough sense in it to stop people asking too many questions.

The Property Ladder is actually a story designed to make first time buyers feel ok about buying small houses that they don't really like.

Just in case that story isn't enough to get you to buy the substandard shoe box, the property ladder story can be enhanced with "if you don't get on the ladder, you'll miss your chance" (Myth 4), and/or "Rent Is Dead Money" (Myth 7)

If the Property Ladder story gives you an uneasy feeling, it may be because you vaguely remember young couples in the 70's buying houses on one salary, and living in those houses all their lives.

It must be said that those young couples may have lived for a time with concrete floors instead of carpets, or deck chairs instead of armchairs, until finances allowed to them to complete their dream home.

Today's home buyer want's all the comforts from day one. And that's a fine aspiration, but it's no reason for taking the myth of the property ladder on faith.

Here are the problems with the property ladder:

• It requires house prices to keep rising. If house prices start falling you leave yourself open to the prison of Negative Equity. Stuck for years in a house that was supposed to be a temporary step.
• It wastes your first time buyer status. The stamp duty alone on that dream home that you ultimately want could be the equivalent of a couple of years rent.
• It isn't necessary. The Property Ladder gets a lot of coverage during a boom because people feel they "Must Buy Something". The reality is that all bubbles burst and in time house prices inevitably give up the gains made during the bubble.

This isn't to say that there's no truth at all in the property ladder. If you buy the right houses at the right prices you can of course take the profits from each into the next.

You simply need to avoid the trap of believing that buying any house at any price simply to get on the ladder is a good idea. A shoe box apartment in a commuter town is not a first step to a Semi-D in Dublin.

If you really want to climb the property ladder there are a few rules to follow:

• You do not want to be on the ladder when prices are falling.
• It only makes sense to buy a starter home if you can realistically expect it to increase in value faster than you can save while renting.
• You should try to buy a starter home as close as possible to the area where you ultimately want to live. Doing so ensures that the value of your target home rises and falls with the value of your starter home.