Research by Nottingham Building Society showed that 48% of people who had purchased in the last year had a deposit of 20% or less.

First-time buyers and others with a deposit of less than 10% made up more than a quarter of the market (27%), the mutual found.

The number of deals for borrowers with small deposits has increased. There are currently 605 deals available at 90% and 95% loan-to-value compared to 581 in November last year.

This is almost double the 325 on offer in November 2011.

More people have also been using mortgage brokers and other financial advisers with 50% of 25-34 year-olds sourcing their mortgage this way.

In addition 40% of those aged 35-44, 28% who are 45-54 and 33% aged 55-64 sought professional financial advice.

Ian Gibbons, Nottingham Mortgage Services senior mortgage broking manager, said: “Homebuyers are demonstrating their commitment for a deposit as highlighted by the average 29% they are able to put down.

“Many will be using the equity they have built up in their home but it is also clear that people saving for deposits are succeeding in the market as well with nearly half of those putting down 20% or less.

“Securing a deposit is of course only the first step as buyers then need mortgages and prices can vary considerably depending on the LTV which is why searching the market is so important.”