There is no way around it. If you want to buy, you will need a substantial deposit in order to borrow the remainder of the property's value.
The mortgage deals that allowed you to borrow more than the value of your property have gone. And although there are still some lenders offering high loan to value mortgages, they are likely to be much more expensive. The bigger the deposit, the better the interest rate.
Outbidding rivals at the last minute is something which is out of our control. Under the Estate Agency Act, estate agents are obliged to pass on all offers they receive.
There's little you can do to repel a determined bidder, but there are ways to lessen the chance of it happening, or at least reduce the impact if it does:
Here are some useful tips to keep in mind when looking for the house of your dreams:
It's human nature to try to strike a deal, but if you find your ideal home and it seems to be priced correctly, consider offering the full asking price. This means you'll be taken seriously, there won't be any time-wasting and it will lessen the possibility of another party stepping - or gazumping you.
One in three property chains fall apart. This can happen for numerous reasons, from one party not having their finances in order, to an unpleasant surprise in the survey.
Under present British house-buying and selling practice, little can be done to alter the process.
The best way to ensure a chain progresses smoothly is through good communication. Stay in regular contact with your conveyancer and estate agent to make sure everything possible is being done to speed things along.
It can also help to stay flexible. Be prepared to move in with your family or rent as a short-term measure if it means you can keep the chain going.
Mortgage arrangement fee
You may have to pay your lender an arrangement fee. They vary but £1,000 is typical. In some cases this is non-refundable, even if the house purchase falls through. Please visit our mortgage calculator.
This is the fee lenders charge for a valuation to check the property exists and that it also offers sufficient security for the loan. The cost varies according to lender and purchase price, but budget for approximately £300.
Many lenders will contribute to legal fees, although in that case you would have to use a solicitor approved by them. If you pay for your own conveyancing, you're looking at about £500-£800, depending on purchase price.
Buy a property for more than £125,000 and you're likely to have to pay a percentage of its price to the taxman. Use our stamp duty calculator to work out exactly how much stamp duty you will be liable for.
Unless you can pile your belongings into the back of a car, factor in a removal van. These start at £100 for small local moves, but can easily run to £1,000 for shifting a family's worldly goods long distances.
From flaky paintwork to leaky sinks, put aside some cash for unexpected property maintenance.
Furniture and extras
Currently renting a furnished place? Remember you'll need to buy everything from beds and sofas to lawnmowers and carpets.
Then there are the boring but essential extras: light bulbs, lamp shades, toilet brush, washing up bowl, door mats, hooks and extension leads.
It's very popular now for first time buyers to boost their buying power by looking for property as a couple. In fact, joint ownership mortgages are available for up to four people (although lenders tend to lend on multiples of the two highest incomes). Lenders have become much more relaxed about who you can take out a joint mortgage with - family, friends, even a stranger looking for property to invest in.
But anyone considering a joint mortgage should ideally rent together first to make sure they really do get on and get a legally drawn up co-habitation or joint ownership agreement when they buy. You need to be clear what happens if someone loses their job, moves a boyfriend in, how you deal with the deposit, what belongs to whom, and so on. Be aware, too, that if one person stops paying their share, the remaining owners are responsible for meeting the whole of the mortgage payment each month.