The fact that more than half of Britain’s working population cannot afford to buy a home underlines the difficulties faced by first-time buyers trying to get on the property ladder. According to the Nationwide Building Society, the average house costs £118,500 and the average salary is £25,000.

But there are some advantages to being a first-time buyer at this time because interest rates are at their lowest for more than 30 years, lenders are competing strongly for your custom, and because you do not have a home to sell you won’t be part of a chain which will make you more appealing to home sellers.

Before you start doing the rounds of estate agents, you need to know how large a mortgage you can get - there’s no point searching for the house of your dreams if it’s out of your price range. Start by approaching several lenders and ask how much they will let you borrow and request an ‘agreement in principle’ that confirms this amount. You can use this to add leverage to any offer you make on a home.

The safest bet for finding lenders of mortgages is to look at the banks. They tend to have the lowest interest rates, and often offer certain rewards if you take a mortgage out with your own personal bank. The other option is to find the large multinational companies, such as Virgin, who offer their own type of mortgage.

The amount you can borrow will be based on the size of your deposit and how much you earn. Lenders are usually prepared to lend you around three times your annual earnings, or if you are buying as a couple, this rises to three times the first income plus the second income, or two and a half times your joint income. Research available mortgages by reading specialist magazines available in newsagents, and money sections in magazines, newspapers and the internet.

If the price of the property you plan to buy is more than £120,000, then you have to pay a government tax called Stamp Duty. The lender will need to carry out a valuation of your prospective home to check it is worth the money it is lending you. This will cost you from around £150. Lenders may also charge an arrangement or completion fee. Legal fees are a major expense. Your solicitor or conveyancer will charge a fee for its services, starting at £400. The land registry costs, a local search (usually between £80 and £150) and other disbursements are also on the solicitor’s bill on which you have to pay VAT. You’ll also need to set aside money for insurance, moving costs and furnishing costs.

If you have a spare room in your home, you are allowed to rent it out to earn tax-free rental of up to £4,250 a year. Any rent over that limit will be liable to tax. Some lenders enable you to take this rental income into account when working out how much you can borrow.

You may be better off going for a new property. The property will usually come with a new bathroom and fitted kitchen and be low on maintenance. Many building companies offer generous deals to first-timers.