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Daily Record
Daily Record
Lifestyle
Jacob Rawley

The Scottish areas named among 'most and least affordable' for UK first time buyers

A Scottish area has been named as the "most affordable" for first-time buyers in the UK, new data has found.

Inverclyde topped the list for affordable local authorities over 2022 in Nationwide Building Society's latest affordability report. Meanwhile, Edinburgh was found to be among the least affordable areas in the UK, taking the 10th spot on the list of expensive areas.

Nationwide calculated affordability for first time buyers by comparing local house prices to earnings, known as a house price to earnings ratio (HPER). Inverclyde has a HPER of 2.6 while Edinburgh's was 6.2.

Inverclyde, Edinburgh and Aberdeen were all named in Nationwide's report (Jonathan Nicholson/NurPhoto via Getty Images)

While there was a noticeable gap between the two Scottish areas, the least affordable Local Authority overall, Westminster in London, had a HPER of 15.6.

Commenting on the figures, Andrew Harvey, Senior Economist, said: "The biggest change in terms of housing affordability for potential buyers over the past year has been the rise in the cost of servicing the typical mortgage as a result of the increase in mortgage rates."

Most affordable local authorities

Region

Local Authority

HPER

Scotland

Inverclyde

2.6

North West

Burnley

3.1

North

County Durham

3.1

Wales

Blaenau Gwent

3.8

West Midlands

Stoke-on-Trent

3.8

Yorkshire & The Humber

North East Lincolnshire

3.9

East Midlands

Bolsover

4.4

East Anglia

Great Yarmouth

5.4

South West

Swindon

5.4

Outer South East

Southampton

5.9

Outer Metropolitan

East Hertfordshire

6.3

London

Bromley

7.4

Mortgage rates rose last year as a result of inflation which has led to the Bank of England increasing its borrowing base rate.

Citizens Advice Scotland said there had been a 223 percent increase in use of their mortgage calculator to work out monthly bills.

Mr Harvey added Scotland typically has the lowest house price to earnings ratios compared to other parts of the UK.

While it did not appear in the most affordable or least affordable lists, Aberdeen was ranked eighth for areas that have seen an improvement in affordability.

The city's HPER in 2021 was 3.4, however this has dropped to 3.1 in 2022, meaning that homes are slightly more affordable based on the average income in the area.

While some positive movement is welcomed, Mr Harvey warned that mortgage rates "are taking longer to normalise" and affordability may only see "little" improvement in 2023.

He said: "There is some scope for affordability to improve a little in the year ahead. Longer-term interest rates, which underpin mortgage pricing, have fallen back towards the levels prevailing before the mini Budget."

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