With a hefty �12,000 deposit, 26-year-old Steve is still stuck in the bedroom he grew up in at his parents' house.

His job as a website developer earns him between �16,000 and �18,000 a year but he has found this does not go very far in the property hotspot of Swindon.

"I've seen one-bed flats for sale and thought: 'Yeah, if that property is still around in a few months' time I'll be able to make an offer.'

"But as soon as they appear in the estate agents' window they're sold."

Born and bred in Swindon, Steve resents the fact that prices here are driven up by the affluent business people who commute daily to London.

Rob Clifford Mortgage Force

Steve's situation is certainly not uncommon. Property prices have increased in some parts of Swindon and surrounding areas by up to 20% in the last 12 months.

This does make life very difficult for first time buyers but Steve has two distinct advantages: His salary is reasonable and he has a healthy deposit available.

These factors can help as some lenders will now lend based on affordability as well as the more "traditional" income multiples, although these have been increased in some cases.

Choosing a product and lender

Before commenting on the amount Steve could borrow, I think I should point out that we would probably be looking to recommend a short term fixed rate to help Steve get accustomed to the monthly costs of home ownership and to protect him from any interest rate increases.

The borrowing limits are as follows, sourced from two different lenders. The first would lend (subject to credit score, etc) up to �75,600 based on 4.2 times Steve's salary.

This is an example of a lender stretching their income multiples for customers earning in excess of �15,000 per annum and having a 10% deposit or more.

Another lender would be prepared (again, subject to credit score) to lend up to �76,700, this amount being based on an affordability calculation.

This should enable Steve to buy somewhere between �87,600 and �88,700.

Warnings

Clearly, while this all seems good news initially, Steve needs to bear in mind that interest rates are very low today.

Steve needs to ensure that once his fixed rate runs out, he is prepared for a possible increase in his payments.

Also, if he does end up on a variable rate in future, interest rate increases will affect his outgoings.

"Careful budgeting" and not "over stretching" himself would be good watchwords for Steve while he is out looking for a more expensive property.

Are you in similar circumstances to Steve?

Tell us your experiences of buying your first home. Please specify the area in which you live.

I am a first time buyer trying to buy in Farnborough, Hampshire. I started attempting to buy a property in April this year, but the vendors were unable to find a property to purchase themselves, so I pulled out and attempted to buy a two-bed detached cottage that needed a lot of work. That unfortunately fell through, so I am finally attempting to buy a much more expensive three-bed detached property, with a larger mortgage. The size of the mortgage will be more than four times my salary, which obviously takes the lion's share of my monthly earnings which is quite risky.
Matt Yorke, UK

I am in a similar situation to Steve. I have just turned 29 and very embarrassingly am still living with my parents. I am earning �18,000 and I have a deposit of �15,000 which I have saved over the past 5 years. Despite all this I am finding it impossible to find a place where I live (Sevenoaks, Kent) as studio flats are going for as much as �100,000 and one bedroom flats are up to �20,000 in excess of this! I have looked into Moat Housing which offer a solution for those who can't get a large mortgage as they allow you to purchase a percentage of a property and pay rent on the remaining percentage. Even so, according to my calculations there would be no money left at the end of the month and it works out more expensive because you pay both a mortgage and rent! My brother is so fed up with the housing situation in this country that he has given up his job and sold his tiny one bedroom flat and is moving to the south of France at the end of the month where he will be able to buy a good-sized property and have a small mortgage. I am thinking of doing the same.
Fenella, England

The Irish housing boom is continuing, despite economic problems elsewhere. I earn a similar wage to Steve, and could not even contemplate buying property - the mortgage I would get just simply does not bring me into the minimum price band to buy even the smallest of properties. I think it is interesting that the whole point of living in a capitalist society is to empower the individual to work to earn the money to buy a home, a car, to support his or herself and not to be a burden on state resources. If, as first-time buyers in our mid-twenties, we cannot afford to buy homes, what social problems is this going to create in the future?
David, Republic of Ireland

I live in Bath, but work in Swindon. I've noticed the increase in prices in Swindon and in Bath. I starting saving for a deposit for a two-bed house in Bath three years ago. But now that prices are so high I'm worried about buying and over-stretching. It's fine that so many mortgage experts mention that mortgages are affordable now. But in a few years time rates could have risen, and any potential affordable mortgage I take out now could result in my life revolving around expensive mortgage repayments and nothing else - no life at all. Twenty five years is a long time. I'm not going to buy in Bath for the time being. The funny thing being that if I had chosen to live in Swindon where it's cheaper (slightly), I would of saved enough faster and bought earlier ! Its only the thought of being caught seriously short in, say, five years' time, that prevents me taking out an "affordable" mortgage now, as I can't see wages rising fast enough to offset this. Once the stock market picks up, and buy-to-lets start to be dropped in favour of higher stock markets returns, then I'll look at commiting. Its a gamble to wait, but I think its a bigger gamble to buy now when prices are so high.
Jonathan Moore, UK

I would like to buy. I am also on �18,000, but I live in Surrey and would be lucky to afford a caravan around here.
John, UK

In all of the cases discussed, the recommendation is to take a fixed rate mortgage to protect against future Bank of England (BOE) interest rate rises. I disagree with this advice. Fixed rates are considerably more expensive than floating rates. Any possibility of an interest rate rise is factored in by the banks, using a pessimitistic scenario. What that boils down to is that you start out paying a higher rate from day one, instead of experiencing a possible increase at some point in the future. And you lose the benefit of any possible reductions in BOE interest rates. The competitive fixed rates on offer are generally accompanied by a catch, or a lock-in at an uncompetitve rate once the fixed term expires. I currently pay 7% variable on my mortgage, but I have no 'introductory rate', no early repayment fees, no lock-in period, no monthly fees, and complete flexibility in repayments. i.e. I plan to pay off my mortgage in under a year, and no other mortgage broker can offer that without fees. The only time I would recommend locking into a fixed interest rate is when interest rates have fallen substantially and are predicted to fall further. The banks will have factored falling BOE rates into their fixed rate, and will be cheap because of it. Then, if the predicted reductions in the BOE rate don't appear, you are left with a cheap fixed rate home loan.
Richard, Australia (formerly London)

I am in a very similar situation myself. Living in the Midlands, and on a salary of around �19,000, it is becoming increasingly difficult for me to get my first step on the ladder. I am fortunate enough to have an Australian passport and, being reluctant to spend the majority of my earnings on a tiny rabbit hutch, have decided to purchase a place down under where you get far more for your money, and where the whole property market seems a lot more stable.
Stephen, England

I'm on a similar salary and I live in Surrey. Unfortunately, I don't have nearly as healthy a deposit as Steve but even if I did, the house prices are so far out of my reach I don't even look any more. However, the company I work for is talking about moving resources to different countries so I wouldn't hesitate to leave and set up somewhere else in the world.
Paul McKay, UK

I have a 5 figure deposit saved up and a salary of over �30,000, but I can't even dream of buying a one-bedroom flat where I live. They cost almost �200,000 on average in Elmbridge, Surrey. Why do people pay so much for so little in the same way as they did with tech stocks in 2000?
Rob, England

I live in London and refuse to buy at these levels. I am waiting for a 50% correction within two years. Before thinking of buying a house read the bbc business section and other sources for a few months and see what's going on in Europe and the States. In a few years you will be so happy you didn't commit now. The only real people to benefit from this market are the banks and the estate agents... not the best people to trust!
Paul, UK