The cost of buying a home is rising, but the upward rate could peak by the end of this year. The good news for Scotland is that home ownership is still more affordable than the UK average - unless you are a first time buyer.

According to Cheltenham & Gloucester's Affordability Index, UK home buyers currently spend an average of #31.50 per #100 of take-home pay on their mortgage.

By the end of this year, buyers will be spending #33 out of every #100, an increase of 5% on the current average. The building society believes that the #33 figure will represent the peak of the cycle and the cost of house purchase will start to fall next year - typically to #31.60 per #100 by the end of 1999.

In Scotland, the average home buyer is paying only #30.60 per #100 - some 90p less than the UK equivalent.

The slight deterioration in UK affordability over the rest of this year is due to rising house prices, higher interest rates, and the reduction in mortgage tax relief from last month. Taken together, these factors will outweigh the benefit of rising earnings.

The good news is that buying your own home now costs less than half of what it did during the 1980s boom when the average UK cost of home buying rose to more than #70 per #100. Back then, the scramble to get on to the property ladder was convincing many people to pay much higher house prices in relation to their take home pay. Interest rates were also spiralling upwards.

However, even in those fevered days Scotland's peak came nowhere near the UK average. The highest figure over the last 10 years in Scotland was in the second quarter of 1990 when the cost of home purchase was #53.20 per #100.

Even as recently as the first quarter of past year, Scots were paying #24.50 in house purchase costs, compared with the current #30.60 - revealing that buying has become steadily more expensive over the past 12 months.

In what builders and estate agents will see as a stark warning for the market, Scotland is among the most expensive places in the UK for first time buyers. The typical first time buyer north of the Border is now paying #31.30 per #100 to fund the mortgage, the fourth highest in Britain and just behind the Greater London first time buyer average of #32.30.

The most expensive place in the UK for first timers to enter the market is the South-east of England (outwith London) where it costs #34.40, followed by the South-west at #33.30. The most affordable place in the UK for first timers is Yorkshire & Humberside where an average of #24.80 per #100 is required to buy that first home.

Cheltenham & Gloucester managing director Roger Burden said: ''Although affordability will deteriorate slightly this year, it needs to be put into context. The national index figure should peak at less than half the level reached in the 1980s. In other words, home buyers will be spending half as much on their mortgage as they were 10 years ago. Home buying will remain very affordable during 1998 and the cost should go down in 1999 as interest rates begin to fall. That's good news for us all.''

The Cheltenham & Gloucester Affordability Index tracks the percentage of take-home pay which typical buyers need to cover a mortgage on an average priced home. The index includes equivalent figures for first time buyers as well. A ''typical home buyer'' is taken as a single income purchaser.

One part of Scotland where property prices appear less affordable is Edinburgh. Although trumpeting a ''healthy'' market, the most recent market report from the Edinburgh Solicitors Property Centre insists that there is ''no boom'' in the capital.

Average prices in Edinburgh now stand at #69,628, some 4.8% higher than they were 12 months ago. The ESPC figures also reveal that market activity is now 10.8% higher than at the same time last year.

ESPC chairman George Clark said: ''Edinburgh's market is in better shape than it's been for years. Some sectors have seen huge increases, yet it's important to stress that we are not having an across-the-board boom.

''Given all the hype about the Scottish Parliament some may be wondering why we're not reporting double figure property price increases. We're convinced, however, that it's still too early to see any directly attributable effects of the Parliament - we've two years to go.''

But he concedes that the overall figures conceal dramatic price increases. The Marchmont/Bruntsfield area has seen 25% price increases since this time last year, much of it over the past few months. Average prices for a two bedroom flat in Bruntsfield are more than #100,000.

Similar sized flats in Stockbridge and Comely Bank are also up, by about 8.3% on last spring. Average two bedroom flats there are now #93,869.

Many recent would-be purchasers in the best parts of Edinburgh have been caught out by the speed of price rises. People offering as much as 10 or 20% over the asking price have found themselves bidding far too low. Maybe no overall boom, but certainly a sudden drop in affordability in some of the capital's most prestigious districts.