A low supply of new houses in Scotland is contributing to affordability problems for buyers, one sector expert has asserted.

Professor Donald MacRae, strategy and finance director and chief economist at Lloyds TSB Scotland, wrote in Scotland on Sunday that more new-builds are needed to meet demand.

Professor MacRae said that the supply of housing rather than low short-term interest rates has contributed to the house price boom.

While acknowledging that the new-build sector in Scotland appears to be more responsive to house prices than in the rest of Britain, he pointed out that private-sector new-build completions increased by just two per cent between 2005 and 2006, compared with house price growth of 77 per cent in the same period.

In related news, recent research from Abbey reveals that 11.2 million people use savings intended for a deposit on a house for unrelated purchases.