Richard Sexton, director of e.surv chartered surveyors, part of LSL, comments:
“Although prices are pretty much flat in 2011, they’ve shown tremendous resilience given the bleak economic backdrop. The upshot of flat prices is that high inflation is slowly making property more affordable.
“Mortgage finance – for those who can access it – is at its cheapest for some time. This is sustaining activity in some sections of the market, specifically buy-to-let investors and existing homeowners who are looking to upgrade.
"It’s a different story for first time buyers, who are being required to build up large deposits to secure a mortgage.
"The majority of them are stuck in the rental sector because banks are focusing on lending to wealthier buyers, particularly since the situation in the eurozone has taken a turn for the worse.
“Things will be just as tough for Scottish first time buyers in 2012. The Council of Mortgage Lenders has done its best to map out a positive year for the mortgage market, but the terrain looks fraught with danger.
"The economic downturn in Europe will push down the amount banks can lend and businesses in the property sector can expect challenging conditions. Rates are slowly beginning to creep up as banks look to pass the increasing cost of funding themselves onto the consumer.
"They will focus mainly on storing capital - new lending to first time buyers will be low on their list of priorities. First time buyers will still enjoy a stamp duty holiday until April, but after that their numbers could decline sharply.
"The government’s mortgage insurance scheme to help first time buyers, which is supposed to be a replacement for the stamp duty holiday, will have a negligible effect.
"It is not on a large enough scale to help push up first time buyer numbers, or even sustain them at their already suppressed level. It will also be interesting to see if the anticipated Referendum on Independence has any effect on prices in 2012."
