First-time buyers make up 50% of Scottish property market
Number of first-time buyers up 56% in the last decade
Average price of first home in Scotland is £141,671
Most affordable place to live is East Ayrshire
The number of first-time buyers in Scotland reached 34,519 in 2018, an increase of 56% from 22,100 a decade ago, according to the latest Bank of Scotland First-Time Buyer Review. (Table 1)
First-time buyers account for 50% of all house purchases with a mortgage in Scotland, up from 37% in 2008. Bank of Scotland data revealed that the average price paid for a typical first home has gone up 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 £19,952¹. (Table 2)
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 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, especially those in East Ayrshire – the UK’s most affordable place for first-time buyers. Those looking for their first place in Edinburgh can expect to pay more than double that.”
First-time buyer affordability
The most affordable local authority district (LAD) 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. (Table 3)
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. (Table 4)
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.