More Scottish Property News.

The Scottish housing market is poised to bottom out and bring to an end months of worry for homeowners, a Herald survey of estate agents and analysts has found.

Figures released yesterday revealed that the number of new mortgages approved for home purchases increased by 27% in December, bucking a longer-term downward trend and bringing fresh hope that the battered housing market will recover.

Most observers now agree that the property downturn is about to reach a nadir in Scotland, where relatively resilient house prices have saved owners from the worst of the shock affecting the rest of the UK.

Bill Cullens, chairman of Clyde Property - Scotland's largest independent estate agent - said all the signs pointed to market recovery in the very near future.

"It's pretty close to it if it hasn't already," he said. "Most estate agents I've spoken to in Glasgow tell me the viewing figures are up just now about 30% on what they were before Christmas.

"There are an awful lot of good deals coming down from building societies, and people are recognising that there are real bargains available."

Liam Bailey, head of residential research for Knight Frank, said analysis of the UK-wide market suggested that rock bottom had yet to be reached and that problems would likely continue through summer before improvements were seen from September onwards.

However, the situation in Scotland could differ significantly from that south of the border, he added.

"I think Scotland could well be slightly earlier than elsewhere because you haven't seen so much boom and bust as the rest of the UK. There wasn't so much of a downturn in Scotland, and it seems logical that it would bottom out and recover earlier than the rest of the country."

One reason estate agents noted for the resurgence in housing was that parents, put off by the low interest for savers, were increasingly turning lender themselves and financing the purchase of their children's first homes.

Firms in Glasgow said they were seeing a growing number of parents lending their offspring money at equal or even higher interest rates than banks or building societies would charge.

The drop in property prices last year could also be more significant than the 16% reported, according to estate agents, as calculations are based on closed deals and so have a six-month time lag before they appear on record. Estimates for the true slump in Scotland were approximately 20%.

John Kelly, a managing partner in Glasgow-based estate agents Corum Property, said: "These figures all lag behind, so they don't show the full effect of the downturn. I think Nationwide said it was about 8% in Scotland, but the reality is it's more than 20%. They are working from a factual basis but ours, I think, is the reality."

Mortgage analysts sounded a cautious note of optimism as the British Bankers' Association (BBA) announced that the number of new mortgages approved for purchase had jumped by more than one-quarter from November to December last year, suggesting that interest rate cuts were beginning to take effect.

Allan Monks of JPMorgan Chase, citing a recent survey by the Royal Institute of Chartered Surveyors, said: "The pick-up in new mortgage approvals in the BBA delivers on the message of a modest pick-up in house purchase activity hinted in the RICS survey.

"Although the level of approvals remains extremely low, the data currently indicate that the steady downward trend in housing transactions has come to an end."

However, the BBA's own statisticians offered a more guarded response to the figures they had compiled, noting an overall drop in numbers from 2008 compared to 2007.

David Dooks, BBA statistics director, said: "The tick up in December is nothing more than a release in pent-up demand. I don't think it's reflective of a recovery. What the numbers are showing is a reflection of the recession. The mortgage market is dead apart from those people who have to move. The lending is not there."

Observers were confident that the situation in Scotland would remain markedly better than that elsewhere in the UK. The Council of Mortgage Lenders has not yet compiled Scottish figures for the last quarter, but Scottish policy consultant Kennedy Foster said: "The trend in Scotland for the first three quarters of last year was downward, but significantly it was not so down as it was for the UK as a whole. I would be surprised if the final quarter was any different."