Borrowers in Scotland are continuing to benefit from the low house price, low interest rate environment north of the border, according to Bank of Scotland (BOS).
House prices in Scotland increased by an average 5%, compared to 12% in the UK. With the same access to low rate mortgage products and high income multiples, Scottish borrowers are finding it easier to get a foot on the property ladder than those in the rest of the UK.
According to BOS, the average house price in Scotland stands at a multiple of 2.7 times average earnings. This is well below the ratio of 4.0 times average earnings seen in the UK. BOS figures say a first-time buyer in Scotland typically spends 14% of their gross earnings on mortgage payments ‘ compared to 16% for the UK as a whole.
Martin Ellis, group economist at HBOS, said: ‘History shows the housing market in Scotland is far more stable than the market south of the border and typically avoids the booms and busts of England. The steadier pace of house price growth in Scotland over the past few years means residential property represents remarkably good value for homebuyers across most of the country.’
Edinburgh is the exception to Scotland’s trend and is one of the UK’s housing hotspots. Ellis said Edinburgh’s current house price rise is down to the city’s economic prosperity, due largely to its success in the financial services sector and the establishment of the Scottish Parliament.