Richard Sexton, director of e.surv chartered surveyors, part of LSL, comments:
“The end of the stamp duty holiday for new buyers sparked a glut of last-minute-merchant activity from first-timers rushing to beat the deadline, and prices rose for the second successive month as a result.
“That so many first time buyers were able to piece together a deposit in the midst of economic downturn is testament to the strong underlying demand from buyers desperate to get onto the property ladder.
"Despite having to cross a relatively high threshold to get a mortgage, there is still strong appetite from buyers who are anxious to avoid remaining stuck in expensive rental accommodation that can be a black-hole for personal finances.
“But that doesn’t hide the fact March’s surge in first time buyer activity was a one-off caused by the stamp duty rush. Banks and building societies are having to contend with increasing funding costs imposed by the problems in the financial markets, and will be forced to scale back their lending to borrowers with low deposits.
"As a result, activity levels in the early summer will fall back to the suppressed levels we’ve become accustomed to. The prospects for the housing market over the coming months will be tightly bound to the fallout from the European financial crisis, which could hamper banks and building societies’ ability to satisfy the high demand for mortgages.
“The positive headline figure for March does camouflage regional volatility of prices. Local house prices have had mixed fortunes: only 15 of the 32 local authorities in Scotland have seen house values rise over the last year.
"Both Glasgow and Edinburgh metropolitan areas have seen prices fall by 1.9% in the last year, despite a wave of activity from buy-to-let landlords looking to snap up flats to use for rental accommodation.
"On a local level, the fortunes of house prices are heavily dependent on the performance of their immediate economies, particularly the impact of public sector austerity and the threat of unemployment.”
