New Bank of Scotland research shows that the average house price paid by a first time buyer (FTB) in Scotland pushed through the £100,000 barrier for the first time in 2006. The average price increased by 17% in 2006 to £108,922 from £92,842 in 2005. Over the past five years the average house price paid by a FTB in Scotland has more than doubled, rising by 108% from £52,377 in 2001.
Despite this increase, the average FTB house price in Scotland (£108,922) is the lowest of any part of the UK and compares with a UK average of £151,565. The number of FTBs in Scotland is estimated to have remained steady at 32,000 in 2006, however this is 16% below the ten year average of 38,000 Scottish FTBs and 36% below the recent peak in 2002 of 50,000 FTBs.
The size of the average FTB deposit in Scotland has more than tripled over the past five years, rising by 238% from £6,300 in 2001 to £21,290 in 2006. Bank of Scotland calculates that a typical FTB was unable to purchase the average house in 89% of towns in Scotland in 2006 (42 out of 47). This represents a further deterioration in the affordability situation for FTBs with the average house unaffordable for a typical FTB in 83% of post towns (39 out of 45) in 2005. In 2001, only 9% of Scottish towns (4 out of 47) were unaffordable.
The least affordable town for a FTB in Scotland is Helensburgh where the average property price is 7.5 times the average income of a FTB household. Four of the 10 least affordable towns in Scotland are in the Lothians with two in Aberdeenshire. The most affordable town in Scotland for a FTB is Lochgelly, where the average property price is 3.4 times higher than a FTB's average income.
Tim Crawford, Group Economist at Bank of Scotland, commented: "First time buyers in Scotland are finding it increasingly difficult to climb onto the property ladder with the average house price paid by a new buyer entering the market now above £100,000. This is more than double the price level of five years ago. The situation for first-time buyers, however, is better than elsewhere in the UK with lower average prices and the typical first time buyer able to afford the average flat in the majority of towns."
