Sharp rise in renting
Scottish house prices expected to jump 30% by 2020
The current average of £191,000 will rise rise to £200,000 later this year and hit £259,000 by 2020.
Other regions of the UK could perform even better with Northern Ireland expecting a 36% rise in prices and both the East Midlands and south of England due to see a 31% rise.
As well as a sharp upward move in house prices, a report from international accountants PwC reveals more householders becoming part of “Generation Rent” – the 20-39 year old age group for whom renting privately is now the norm.
The 5.4 million rented homes is up 130% since 2001 and is expected to rise to 7.2 million – almost one in four in the UK – by 2025.
The number of householders with mortgages is likely to fall from around 10 million to 8 million as large deposits – already up almost five-fold since the late 1990s – affordability and mortgage availability make it harder for first time buyers to get on the housing ladder.
It means that by 2025 there are likely to be more people renting than buying a home.
Commenting on the trends, Paul Brewer, government and public sector partner at PwC in Scotland, said: “With house buyers facing a triple whammy of affordability, stringent credit conditions and a sharp rise in lender deposit requirements, it’s perhaps not surprising that Generation Rent is here for the medium term at least.
“First time buyers are particularly hard hit, with many now having to turn to private landlords as demand outstrips supply in the housing market.
“Affordable, quality housing is a necessity if we are to achieve our economic ambitions for Scotland. With the ‘right to buy’ scheme set to end on 31 July 2016, it will be interesting to see how the Scottish Government’s strategy and action plan addresses these issues and crucially, plugs the gaps at this end of the housing market.
“Collaboration among developers, social housing providers and government alongside radical and innovative investment measures will be key to solving Scotland – and the UK’s – housing market challenge.”