But while it makes economic sense to be cautious in such uncertain conditions, it would appear that the negative connotations for first-time buyers have been somewhat overcooked. Research by professional advice website Unbiased suggests many of Britain’s would-be borrowers may wrongly assume they are excluded from the mortgage market by lenders’ tougher criteria. When asked what size deposit the average borrower would need to get access to a reasonable mortgage deal, nine per cent of people thought they would require a deposit of at least 40 per cent, while 18 per cent felt the typical applicant would be unsuccessful with any less than a 30 per cent down payment. In reality, the average deposit needed to get one of the current best buy mortgages is just under 22 per cent, according to Unbiased [correct as of 23/2/09].

David Elms, chief executive of Unbiased, says: “With the credit crunch in full swing and lenders tightening their lending criteria, it is not surprising that people are confused about the mortgage options available to them. Britain has been gripped by the recession doom and gloom and this has led to an extremely pessimistic view of the mortgage market. In reality, while the lending criteria we have seen applied over the last few years are a thing of the past, there may well be options available to people looking to take out a new mortgage.”

Elms suggests seeking advice from whole-of-market mortgage advisers who can look at all of the homeloans available and find a suitable deal not based solely on the rate but also by income multiples and the loan-to-value (the percentage of the property’s value you are borrowing) required.

Get saving

The picture may not be as bleak as you first feared, but you will still have to save some form of deposit, barring an extremely generous familial donation. Research by Abbey indicates that first-time buyers have remained steadfast throughout the trying economic conditions, with 38 per cent resolving to increase the rate at which they save towards a deposit in 2009. Of those without any form of deposit, 40 per cent have decided to start saving this year. Those who have already started saving intend to ramp up their monthly amount by an extra £203, while those getting the ball rolling aim to save £123 each month.

Reza Attar-Zadeh, director of savings and investments at Abbey, says: “Homeownership is beginning to look like a much more realistic goal for thousands of first-time buyers who have clearly been keeping an eye on house prices. Building a deposit is no small task, but those who have chosen to start putting extra money away are clearly better prepared to make an offer on a property when they see their opportunity. Savers need to be aware that a large deposit will make it easier for them to be accepted for the best mortgage deal.”

Further proof that potential homeowners are not being put off trying to buy property comes in the shape of findings by the National Association of Estate Agents (NAEA) which reports that the proportion of first-time buyers looking to put a foot on the property ladder more than doubled in the first two weeks of 2009. Its figures revealed 22.5 per cent of registered buyers were first-time buyers, up from 10 per cent in December and 14.5 per cent in January 2008.

Peter Bolton-King, chief executive of the NAEA, says: “This figure is highly significant in terms of demonstrating an increase in consumer confidence. First-time buyers are the bedrock of a healthy and confident market. While the figure [22.5 per cent] is definitely not a sign that the housing sector is out of the woods yet, it does suggest that those infamous green shoots of recovery may not be as far off as first thought. However, unless lenders respond to consumer demand, then any green shoots will wither and die on the branch.”

Taken into account

One obstacle you will have to overcome before swelling your coffers, is finding the best home for your savings. As the Bank Base Rate has fallen to record levels, so too have the interest rates available on savings accounts, meaning the benefit you receive from them at present is negligible. While it is always important to shop around for any financial product, don’t be too pre-occupied with trying to find the savings account with the best interest rate in the short term, but one that will help your money grow over the long term.

If you don’t have much willpower, you may want to place your savings in a notice account. These do not allow you to access your funds immediately, reducing the chance of you raiding your savings for an impulse buy. Perhaps the best home for your savings in the current climate is an individual savings account (ISA). You can choose between a simple cash ISA or a stocks and shares ISA which is dependant on fluctuations in the stock market. The main advantage of ISAs is the fact that they are tax free whereas other savings accounts are at the mercy of the taxman. If you are still unsure as to the best home for your savings, speak to an independent financial adviser who should be able to find a way to make your money work as hard as possible for you.

With no end date in sight for the current economic slump, it may feel like putting money away is too difficult as you survive on a hand-to-mouth basis. But if you can manage to squirrel away some funds, you could be in a great position to take advantage of house prices that are more affordable than they have been in years.