Number of first-time buyers in Scotland at seven-year low

03 September 2020

  • Number of first-time buyers dips as property prices increase by 42% in past decade
  • North Ayrshire most affordable area to buy a first home in Scotland
  • Average first-time buyer deposit now £31, 257

The number of first-time buyers in Scotland is at a seven-year low, falling over a third (35%) since last year, as many reconsider their options in the wake of the pandemic.

The latest data from Bank of Scotland revealed that in the first six months of 2020 there were 10,158 first-time buyers, compared to 15,570 over the same period in 2019. This is the lowest number of buyers taking their first step onto the property ladder since 2013.

The fall comes despite first-time buyers making up over half (51%) of the property market, up from 37% in 2009.

Meanwhile the cost of a first home has risen 42% in the last decade, with the average price of a first-time buyer property increasing from £108,774 in 2010, to £154,449 today. This compares to an average 34% rise for home-movers. Scottish first-time buyer properties have seen a 4% rise in the last year alone.

While a number of first-time buyers were unable to take their first step onto the housing ladder during lockdown, we are already seeing activity levels growing as buyers kick off their property searches once again and look to make the most of the Government support available.With properties in the capital costing more than five times the average local salary while other areas remain affordable, the challenges facing first-time buyers are heavily influenced by where in the country they are house-hunting.

Graham Blair, Mortgages Director, Bank of Scotland, said:

Dramatic deposits

Scottish first-time buyers are putting down record deposits, averaging £31,257 in 2020, which is 27% higher than 2010. However, deposits as a percentage of the property price continue to slide from their peak of 23% a decade ago, to 20% today.

The average deposit for a first-time buyer in Scotland is also a third less than the UK average of £47,059.

In Edinburgh, first-time buyers are putting down the largest deposits, with an average of £49,575 (24% of the property price). This is followed by Stirling in the Central Belt (23%), further North in Moray (22%) and the Highlands (22%).

Buyers who are willing to look around could consider homes in East Ayrshire, which has the smallest average deposit, at £16,656 (15% of the property price). First-time buyers could also consider West Dunbartonshire – where the average deposit is also 15% of the property price – and Inverclyde (16%).

Average first-time buyer now aged 31

The average age of a first-time buyer continues to rise gradually, from 29 a decade ago to 31 in 2020. This mirrors the average age across the UK, which has risen from 30 in 2010 to 31 today.

The youngest buyers can be found in Falkirk, South Ayrshire, Angus, and the City of Edinburgh, where the average age of someone taking their first step onto the property ladder is 30. The oldest buyers are in Dundee, Perth and Kinross and the Scottish Borders, where the average age is 32.

Cost-effective Caledonia

Areas are considered ‘affordable’ when property prices are no more than four times local earnings. Scotland’s most affordable area for a first-time buyer can be found in North Ayrshire, where the average property price is 3.2 times the average local salary. East and South Ayrshire closely follow, with properties costing 3.3 and 3.6 times the average local income respectively.

Buyers looking to get the biggest ‘bang for their buck’ may also want to look at Renfrewshire, or West Dunbartonshire, where property prices are also 3.6 times the average local earnings.

Midlothian is Scotland’s least affordable area, with properties costing 5.3 times the average local salary. This is closely followed by the City of Edinburgh and East Lothian, where first-time buyers can expect their first property to cost 5.0 times local salary.

Edinburgh continues to be more affordable than the UK capital, with properties in Brent, North London, costing 12.3 times the average income, making it the UK’s least affordable area.