More home owners expect their property to increase in value

The Clydesdale Bank research said they were being hit by a surge in house prices and a rise in interest rates.

More than 40% were prepared to buy houses they did not really like, while 36% thought they would end up in areas they did not want to live.

One in five first time buyers admitted offering way over the odds for homes.

Almost 400 people were questioned across Scotland for the bank's housebuyers survey.

It's a sad situation when people are buying homes they don't really want, in places they don't want to live and at prices inflated by sheer desperation Steve Reid Clydesdale Bank

It found that four in 10 first time buyers were facing a quandary - whether to save up a deposit and risk being priced out of the market, or go for a 100% mortgage and risk negative equity.

Some 37% of those questioned said they had given up hope of buying their first home in the coming year.

Steve Reid, the Clydesdale Bank's head of personal financial services, said: "Our latest survey of housebuyers has uncovered the emergence of some worrying trends, particularly amongst first time buyers, as both prices and interest rates increase.

"First time buyers clearly need help - especially as their predicament is endangering the property market as a whole - but we are firm believers in responsible lending.

"Increasing numbers of other lenders out there are now offering very high income multipliers which can be very risky."

He said this could encourage people to take on levels of debt which could become unmanageable if interest rates rose further.

People are prepared to pay over the odds for a house

Two-bedroom terraced houses were the property of choice for more than 40% of those questioned.

"Such is their desperation to get hold of a house, our research shows first-time buyers are fuelling their own frustrations by entering bidding wars for these properties," said Mr Reid.

"Forty per cent of people in Scotland are prepared to offer at least 25% more than the 'offers over' price to ensure they have a chance of getting a house.

"It's a sad situation when people are buying homes they don't really want, in places they don't want to live and at prices inflated by sheer desperation."

The survey also found that two thirds of home owners thought their property's value would rise over the coming year - an increase of 5% since January.