Stirling: Scotland’s most affordable city

There has been a further deterioration in home affordability in Scottish cities, according to the latest Bank of Scotland research.

The average Scottish city house price has risen by almost 3 per cent from £181,061 in 2016 to £186,002 in 2017, a faster increase than the 1 per cent for the whole of Scotland. This has resulted in average home affordability in Scotland’s cities worsening in the last 12 months from 5.2 to 5.3 times gross average earnings; the fourth successive annual decline in home affordability.

Stirling is the most affordable city for homebuyers in both Scotland and the UK – at £173,848, the average property price in this city is 3.7 times average gross annual earnings. This is much lower than the UK cities average of 6.9.

Edinburgh, however, remains Scotland’s least affordable city. Edinburgh’s average house price of £236,136 is six times annual gross average earnings, ahead of Aberdeen (5.7), Perth (5.7), Dundee (5.5) and Inverness (5.5).

Graham Blair, Mortgage Director at Bank of Scotland says: “Homebuyers in Scotland’s cities have seen affordability levels worsen for the fourth consecutive year as average city house prices have continued to rise more steeply than average wage growth. However, the average price to earnings ratio in cotland’s cities is 5.3 – lower than the UK cities average of 6.9. It’s little surprise that Edinburgh retains its title as Scotland’s least affordable city, with Aberdeen and Perth close behind. Stirling now takes the top spot as the UK’s most affordable city, as well as Scotland’s.”


Scotland leads UK mortgage affordability

8th February 2017

Scotland is home to the most affordable mortgages in the UK, according to new research from the Bank of Scotland.

Mortgage payments in the country take up 19.8 per cent of disposable earnings for both first time buyers and homemovers, significantly lower than the 29.7 per cent recorded in the UK.

The most affordable Local Authority District (LAD) in Scotland is West Dunbartonshire, where mortgage payments swallow up 15.4 per cent of disposable income (as of Q4 2016). It also the most affordable area in the UK to be a homeowner. North Lanarkshire (15.6 per cent), East Ayrshire (14.6 per cent), Renfrewshire (16.6 per cent), Inverclyde (16.8 per cent), Stirling (17 per cent) and Falkirk (17.2 per cent) also dominate the UK’s 10 most affordable LADs.

Although the majority of Scottish LADs have seen a slight increase in the amount of earnings devoted to mortgage payments when compared to Q4 2015, mortgage affordability in Scotland has improved by 17.5 percentage points since reaching a peak of 37.3 per cent in Q3 of 2007.

Historically low mortgage rates have been the main driver behind the significant improvement in affordability since 2007. Despite average Scottish house prices growing by 9 per cent in the past year, mortgage affordability in Q4 2016 rose only marginally from a year earlier.

Graham Blair, Mortgage Director at Bank of Scotland, comments: “Scottish homeowners have seen a decent improvement in housing affordability since 2007 as record falls in mortgage rates have offset higher house prices. As a result mortgage payments account for a lower proportion of disposable earnings than anywhere else in the UK.”

Indeed, the figures reveal a clear north / south divide in the UK’s housing affordability, with mortgage payments are at their lowest as a proportion of disposable earnings in Scotland (19 per cent), Northern Ireland (20 per cent), North (23 per cent) and Yorkshire and the Humber (23 per cent) and the North West (24 per cent). Payments are highest in relation to earnings in Greater London (49 per cent), the South East (41 per cent) and the South West (34 per cent).