Perth has seen the biggest improvement in terms of home affordability in Scotland over the last five years and Stirling is the most affordable city in the whole of the UK, according to the latest research.
The average house price in Perth has risen by 11% to £181,329 in the last five years, lower than the average of all other Scottish cities which increased by 23% to £190,250, according to the research from the Bank of Scotland.
This also means that Perth is the only city in Scotland where homes are more affordable than they were five years ago, improving from 5.5 times the average yearly salary to 5.44. Perth also had the biggest improvement in home affordability over the last 12 months.
Stirling is the most affordable city in the whole of the UK when comparing average house price to average wages. The average house price in Stirling is now £186,084, which is 4.03 times local average earnings. This is below the overall average ratio in Scotland of 5.35 and the UK average of 7.20.
The research also shows that average house prices in Glasgow increased faster than in any other Scottish city, up 35% in the last five years. In 2012, the average house price was £128,733, rising to £173,990 in 2017. Glasgow has also seen the steepest decline in home affordability in the last five years from 4.27 to 5.50 times average earnings.
Overall, home affordability in Scotland has improved very slightly in last 12 months. The average house price across all Scottish cities increased by 1.8%, from £186,827 in 2016 to £190,250 in 2017. Comparatively, average earnings increased by 2%, resulting in average home affordability improving very slightly in the last 12 months from 5.36 to 5.35 times average earnings.
Edinburgh, Dundee and Perth all saw an improvement in average home affordability over the past year with a slight decline for Aberdeen. Inverness, Glasgow and Stirling also saw a decline but still feature in the top 20 most affordable UK cities.
‘It will come as no surprise to anyone looking to buy a home in Scotland that affordability is not improving by much but compared to the rest of the UK, the dream of living in one of our cities is more achievable,’ said Ricky Diggins, director at Bank of Scotland.
‘Surprisingly, homes in Edinburgh have become more affordable in the last 12 months, although house prices in our capital continue to be more expensive than in all other Scottish cities,’ he added.
In the last five years, the average house price in the UK has increased by 45% to £255,183, compared to 23% for the average house price in Scottish cities. Average house prices in all Scottish cities are now lower than the UK average, compared to 2012 when Aberdeen was 0.2% higher and Edinburgh was 10% higher.
Five of the top 20 most affordable cities in the UK are in Scotland. Stirling at 4.03, Londonderry in Northern Ireland at 4.1 and Bradford at 4.5 are the top three cities in the UK in terms of affordability. Dundee and Perth at 5.4, Glasgow at 5.5 and Inverness at 5.6 also appear in the top 20 most affordable cities in the UK.
Source: Property Wire