First-time buyers struggling to get on the property ladder are becoming increasingly prepared to take greater financial risks as the third interest rate rise in five months looks set to have only a minor impact on slowing rising house prices.
With house prices in Scotland rising by 8.9% according to the latest quarterly figures, significant numbers are considering mortgages based on more than five times their salary.
And home loans spread over more than 25 years to make the monthly payments more manageable are no longer scaring the majority - despite the resulting huge increase in the amount they will have to ultimately pay back.
Only 20 per cent of first-time buyers would shy away from a mortgage which took longer than 25 years to pay off, according to Clydesdale Bank's latest Housebuyers report. And just two out of five (39%) would rule out a home loan which was five times their income.
Steve Reid, Clydesdale Bank's director of retail banking, said: "With the average house price in Scotland nearing £143,000, this year may feel like the last chance saloon for first-time buyers already finding it hard to buy.Two rate rises last year did little to slow house prices and it looks unlikely this latest rise will have any significant impact either. Therefore, their fears are the longer they leave it to buy, the harder it will be.
"To try and get onto the property ladder now before prices are totally out of reach, first-timers are taking greater financial risks with the majority now considering mortgages which are more than five times their income or taking longer than 25 years to pay off. Saddling themselves with such huge debts isn't wise as they could still be paying off their mortgage well into their sixties or even seventies. They may also face breaking point should interest rates increase again. Unfortunately for some, they feel it is their only option."
It's a family affair
Parents with young children are so concerned that their offspring will still be living with them well into their thirties, they are starting funds now to try and help them buy their first home in years to come.
More than one in four (27%) think that should prices continue to rise then their children will be well into their thirties before they can afford to move out and buy their own property. So worried are one in seven parents (14%) they have even started a home fund to try and help their children buy when they are older.
To try get on to the property ladder, more than one in four (26%) first-time buyers think they will have to join forces and buy with another family member, according to Clydesdale Bank's findings.
Steve Reid said: "Two incomes are obviously better than one when purchasing a house, hence why buying with a family member is looking like a solution for many. Buying with a relative should also reduce the temptation to overstretch with large and lengthy mortgages.
"It's also good to see that parents are looking long-term and investing in a home fund for their children."
Keeping payments to a minimum
Nearly two in five (38%) first-time buyers would now take out an interest only mortgage to try keep their mortgage payments to a minimum in their first few years as a homeowner.
A further one in 10 (7%) are planning to move a lodger in to help with payments.