First-time buyers could face increased competition

New rules coming into force next year will allow wealthy investors to buy houses using their pension funds.

The shake-up could make it tougher for people dependent on mortgage borrowing, research by the Clydesdale Bank suggests.

The regulations will allow Self Invested Pension Plans (SIPPS) to put money into property.

Buyers with substantial funds will be able to invest in residential housing for the first time.

First-time buyers are worried their chances of losing out on properties could be increased Steve Reid Clydesdale Bank

The move means they would often be bidding against first-time buyers for properties which would be suitable for rental.

Researchers found that two thirds of Scots expected prices to rise in the next 12 months, while a minority of those questioned thought interest rates were likely to go up.

However, values could be lifted further by the SIPP reforms.

Clydesdale Bank spokesman Steve Reid said: "Reports of rising prices and the new legislation next year are understandably unsettling for first-time buyers.

"They were hoping to benefit from the more recent stable market conditions.

"First-time buyers are worried their chances of losing out on properties could be increased as many investors will be targeting the same kind of properties."

He added: "Investors are likely to hold the upper hand, confident they can afford to extend further over the fixed or offers over price, safe in the knowledge that they'll get their money back in the long-run."