THERE are two big questions to be asked when weighing up the Chancellor's chances of success in his budgetary bid to kick-start the stalled housing market.

The first is whether the market has reached the bottom. If not, any scheme to encourage people to buy property could saddle them with debts they will not be able to clear by selling their properties – which is the exact problem that a large portion of the country has already.

According to Registers of Scotland, the average property price is actually slightly higher than in 2007 – £151,602 then, £154,096 now. But when you take inflation into account, the picture changes. Today's average value sinks to about £121,000 in 2007 prices – a fall of 20%. And it gets worse when you look at flats, the type of properties hit hardest by the deposits problem. The average price has dropped from £127,474 in 2007 to about £90,000 including inflation – nearly 30%.

Many argue that this drop is likely to continue. Professor David Blanchflower, a former member of the Bank of England's Monetary Policy Committee, recently made the point that prices are around 4.5 times earnings, against a long-term average of 3.5 times, reflecting the fact that salaries have not kept pace with inflation since the 2008 global financial crash. That led him to predict that prices might yet come down by another 15%.

Ed Stansfield, head of property research at Capital Economics, says: "All the available evidence suggests prices are out of line with where they should be, based on the current levels of rents and incomes.

"They have been kept there [at a higher level] because unemployment hasn't risen as far as we might have expected, interest rates have been very low and banks have been showing high levels of forbearance [ignoring bad property debts]."

Philip Hogg, chief executive of Homes For Scotland, which represents Scottish housebuilders, says this is beside the point. He says: "You have to separate the economics angle from the social angle. People need roofs over their heads and property shouldn't be seen as an investment. It should be seen as somewhere you need to live."

He adds: "We can't put the world on hold while we wait for any price correction, which is debatable anyway. We have to carry on building. We only built 15,000 homes last year. Registers of Scotland's own forecast is we need 25,000 each year to meet demand."

George Osborne's Budget focused on what is seen as the root of the problem: buyers cannot muster the large deposits banks are demanding before they will lend at sensible rates.

From next January, the Treasury will begin a three-year mortgage guarantee scheme to cover the cost of defaults on deals where the buyer can amass at least a 5% deposit. This will make available a maximum of £12 billion of underwriting, with a view to unlocking £120bn of lending from banks. The money will be available for all types of house purchases, on properties with a value of up to £600,000.

And buyers of new homes will receive a second stimulus from next month – though not in Scotland, at least initially. The Help To Buy deal will take the form of interest-free loans worth between 5% and 20% of the property value, replacing an existing deal called First Buy, which is restricted to first-time buyers and properties up to a value of £280,000. Now, so long as the buyer can find a 5% deposit, it will also be open to those trying to move up the property ladder, up to a value of £600,000.

First Buy does have a rough equivalent in Scotland called the Low-cost Initiative for First-Time buyers (LIFT), but Help To Buy will only apply in England. The Scottish Government has been offered money to implement a similar scheme here, but has yet to decide whether to go ahead with it.

Philip Hogg has been calling loudly for the Scottish Government to implement the Help To Buy package. He represents a sector that has had a torrid recession. Many companies have either gone bust or only survived after handing over big chunks of their shareholdings to the banks. Life is still hard, with total construction down 7% in the past year.

There was a ray of light last week when Lloyds Banking Group managed to offload its holding in Edinburgh-based Cala Homes to Legal & General and Patron Capital Partners for £210 million, but Hogg says his members are far from out of trouble.

"The small and medium-sized firms are still finding it incredibly tough to secure finances. They are in a precarious position. Hence they need this support to get the market moving," he says.

The second big question is whether the Chancellor's moves will actually encourage more lending. Scotland has offered a more modest version of the new mortgage guarantee scheme called My New Home since last September – roughly the same time as the UK Funding For Lending scheme got under way, aimed at making cheap money available to banks for lending.

So far figures are not showing major changes. There were 40,223 properties sold in Scotland in the second half of last year, against 40,119 in the same period the year before. The average house price fell 5% in real terms over the same period.

The Treasury's Office for Budget Responsibility concluded last week that Funding For Lending had so far brought down mortgage rates but had not increased the amount of lending. The last year when it was this low was 1996.

Ed Stansfield of Capital Economics is unconvinced of how much difference the new scheme will make. Lenders are said to be concerned the Government has been clear that it will underwrite loans, but will not make new money available. This runs the risk of simply replacing a set of more affluent buyers with a set of buyers who would otherwise have been priced out of the market. "There's a danger you are just playing pass the parcel," Stansfield says.

Obviously, the Chancellor is aiming for another national game of Monopoly instead. If this is really a route out of the doldrums, there should be some indication in the coming months.