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Boost for housing sector

First-time buyers return to Scottish property market

Aberdein Considine sale

More first-time buyers is good for the wider property market 


 

Homes are becoming more affordable to first-time buyers, according to the latest data from Bank of Scotland.

The number of first-time buyers in Scotland reached 34,519 in 2018, an increase of 56% from 22,100 a decade ago.

They account for half of all house purchases with a mortgage in Scotland, up from a just over a third (37%) in 2008.

East Ayrshire has emerged as the UK’s most affordable place for first-time buyers while those looking for their first place in Edinburgh can expect to pay more than twice a much.

The data revealed that the average price paid for a typical first home has risen 19% from £119,402 in 2008 to £141,671 in 2018, while the average deposit has increased by 11% over the same period, from £17,910 to £19,952.

In the last 12 months, the number of first-time buyers in Scotland dipped slightly from a peak of 35,100 in 2017 – the highest over the decade. The lowest number of first-time buyers in Scotland in the last decade was 16,700 in 2011.




The average deposit put down by a first-time buyer in Scotland was 15% of the purchase price in 2008, jumping dramatically to 25% in 2009 in the midst of the financial crash. In 2018, the average deposit has dropped to 14% of the purchase price, although the average property price has continued to increase.

The £19,952 average deposit being put down on a first home in Scotland is just over half of the UK-wide average of £33,352, although those in Wales are paying the lowest average deposit (£16,701). 

Two-bedroom properties have been the first-time buyer’s home of choice in Scotland throughout the past decade, making up more than four in 10 mortgages for first homes in 2018. 

Ricky Diggins, director, Bank of Scotland, said: “There has been steady growth of new buyers coming on to the property ladder in Scotland over the last decade, with the proportion of first-time buyers now representing half of the overall market. This is important for the wellbeing of the Scottish property market, and has been helped by factors such as continued low mortgage rates.

“With a much lower deposit required north of the border, first-time buyers in Scotland will have to put down a lot less to get the keys to their first home,”

First-time buyer affordability

The most affordable local authority district in Scotland is East Ayrshire where the average price paid for a first home is £94,376, three times the local gross average annual earnings, closely followed by Inverclyde and South Ayrshire.

The highest average price for those taking their first step on the property ladder is in Edinburgh, where at £196,091, it is 4.8 times the average gross annual earnings.  

The least affordable local authority district in Scotland is Midlothian with an average property price of £168,898 – 5.3 times the average gross annual earnings.

Number of first-time buyers, Scotland 2008 – 2018

 

Number of First-Time Buyers

Annual % change

FTBs as % of all House Purchases Loans

2008

22,100

-38%

37%

2009

17,800

-19%

38%

2010

17,700

-1%

37%

2011

16,700

-6%

38%

2012

19,200

15%

41%

2013

23,900

24%

44%

2014

27,300

14%

47%

2015

29,700

9%

46%

2016

31,600

6%

49%

2017

35,100

11%

50%

2018

34,519

-2%

50%

Source: UK Finance

Number of first-time buyers: Average price, loan and deposit by Scottish region, 2018

 

Average House Price (£s)

Average Mortgage (£s)

Average Deposit (£s)

Aberdeenshire

174,726

150,118.85

24,607.26

Angus

124,506

106,971.03

17,534.53

Argyll and Bute

120,594

103,610.16

16,983.62

Clackmannanshire

115,871

99,552.47

16,318.49

Dumfries and Galloway

109,475

94,056.87

15,417.66

Dundee City

124,239

106,742.23

17,497.03

East Ayrshire

94,376

81,084.74

13,291.29

East Dunbartonshire

192,198

165,130.30

27,067.92

East Lothian

175,712

150,965.83

24,746.10

East Renfrewshire

188,165

161,665.00

26,499.89

Falkirk

122,347

105,116.27

17,230.50

Fife

123,055

105,724.81

17,330.25

Glasgow City

144,683

124,306.99

20,376.22

Highland

140,064

120,337.94

19,725.62

Inverclyde

99,045

85,096.46

13,948.89

Midlothian

168,898

145,111.48

23,786.46

Moray

129,888

111,595.60

18,292.59

North Ayrshire

99,651

85,616.96

14,034.21

North Lanarkshire

111,064

95,422.80

15,641.57

Perth and Kinross

149,908

128,795.87

21,112.03

Renfrewshire

119,092

102,319.70

16,772.09

Scottish Borders

119,715

102,855.01

16,859.84

Shetland Islands

157,466

135,289.50

22,176.46

South Ayrshire

112,475

96,634.79

15,840.23

South Lanarkshire

115,632

99,347.46

16,284.89

Stirling

154,226

132,505.97

21,720.18

City of Edinburgh

196,091

168,474.53

27,616.10

West Dunbartonshire

102,792

88,315.46

14,476.54

West Lothian

152,951

131,410.73

21,540.65

Scotland

141,671

121,719

19,952

Sources: Halifax Housing Data, UK Finance

Most affordable local authority districts for first-time buyers, Scotland, 2018

Local Authority District

House Price to Average Earnings ratio

East Ayrshire

3.0

Inverclyde

3.1

South Ayrshire

3.1

West Dunbartonshire

3.3

South Lanarkshire

3.4

North Lanarkshire

3.5

Renfrewshire

3.5

Stirling

3.5

Scottish Borders

3.6

Dumfries and Galloway

3.7

 Sources: Halifax Housing Data, ONS

Least affordable local authority districts for first-time buyers, Scotland, 2018

Local Authority District

House Price to Average Earnings ratio

Midlothian

5.3

East Lothian

5.0

City of Edinburgh

4.8

Aberdeenshire

4.6

East Dunbartonshire

4.6

West Lothian

4.5

Glasgow City

4.4

Highland

4.2

Moray

4.2

Perth & Kinross

4.1

Sources: Halifax Housing Data, ONS



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