First-time buyers are being affected by recent increases in interest rates, according to TSB Scotland's latest House Price Monitor. While most property prices in Scotland marked time over the last three months, flats - traditionally first-time buyer homes - fell by 1.5%. ''This suggests that newcomers' confidence has been dented by successive interest rate rises,'' says Donald MacRae, a TSB economist. However, detached houses continued their strong rise, showing a 4.1% increase over the quarter and a 2.5% year-on-year rise.

Alan Baxter of estate agents Slater Hogg & Howison, a TSB subsidiary, says Glasgow's best suburbs - such as Bearsden, the West End, Clarkston, and Giffnock - saw strong demand over the last quarter. The southern suburbs are benefiting from the impact of the new M77 bypass, while price increases in the best residential areas north of the river are being driven by the shortage of houses available for sale.

''New homes have also sold very steadily, with incentives attracting buyers who may not originally have considered a new property. Elsewhere, with the exception of a very busy Edinburgh, the market remains quite unremarkable,'' says Alan Baxter. But he is confident that the modest price increases in most areas provide buyers with an ''affordable'' platform for moving home.

Although the overall picture in the Scottish market is relatively static, the report reveals several hot spots - especially in Aberdeen and Dundee. Aberdeen city saw an average rise of 6.2% over the three months to the end of October. While most houses in the granite city are selling at around or just above asking price, the very best pro-perties can achieve premiums of as much as 20% over asking price.

The Aberdeen market shows no sign of moving into its traditional quieter period at the end of the year, according to loal agents Ledingham Chalmers.

Dundee's prices went up by 2.5% over the quarter. And outwith the cities, areas such as North-east, Central Perthshire, and Tayside all recorded annual price rises. By contrast, both the South-east and South-west of Scotland saw falls - not only over the last quarter but also on a year-on-year basis.

While the Scottish market remains ''stubbornly unaffected'' by the price boom in the south of England and the confidence of first-time buyers appears to have been affected by interest rate rises, owners seem confident about the future. ''The supply of desirable, high-quality houses remains low, pushing up prices of detached properties in the most desired areas - but lower-priced properties are showing price falls. ''Subdued'' appears to be the best way to describe the current Scottish housing market, says Donald MacRae.

But the report is upbeat about prospects for growth in the Scottish housing market generally.

''Projections for the year 2008 indicate that West Lothian and Shetland will have the largest percentage increase in total households of around 23% each,'' says Donald MacRae. ''Dundee City, West Dunbartonshire, and Glasgow city have the smallest projected increase - of 3%. A fall of 2.5% is predicted in Inverclyde, and the city of Edinburgh is forecast to have the largest actual increase of 29,000 more households - a rise of 16%.''