Stirling named most affordable city in UK

By RORY REYNOLDS
Published on 23/03/2013 04:46

HOMES in Scottish cities are becoming increasingly affordable a new study claims, with Stirling one of the cheapest in the UK.

The average price for an urban home in Scotland is now £159,450 – 5.15 times average salaries. That is 22 per cent below the peak of 6.57, recorded five years ago.

City properties north of the Border are significantly more affordable than the UK average, according to the Bank of Scotland Affordable Cities Review.

Nitesh Patel, housing economist at the bank, said: “There has been a significant improvement in housing affordability in many of Scotland’s major urban areas over the past five years, largely reflecting the general decline in house prices since 2008.

“The average price for a city home in Scotland is significantly below the peak of 2008 and is more affordable than the UK city average.

“Looking forward, the marked improvement in city affordability is likely to help support demand for those able to raise the necessary funds to enter the housing market.”

Stirling was named the most affordable city in Scotland – and the fourth in the UK – with an average price that is 3.81 times average salaries in the area. The next most affordable Scottish city is Glasgow at 4.23, which comes seventh in the UK. Inverness was the least affordable city, with a ratio of 5.71.

House prices have fallen in Scottish cities in recent years, improving affordability. Since 2008, the average city house price has fallen by 15 per cent from £187,377 to £159,450 in 2013.

Dundee is named the third most affordable city in Scotland with a price-to-earnings ratio of 4.67, followed by Aberdeen, where the average house price of £180,017 is just over five times gross average earnings. Edinburgh – with an average price of £196,903 – is next on the list, followed by Perth and then Inverness as the least affordable.

The ten least affordable cities to buy a home in were all in the south of England, where house prices have remained strong, including Salisbury, Bath, Brighton and Exeter.

Across the UK, Londonderry is the most affordable city with an average property price of just £94,776 – 3.38 times gross ­average annual earnings.

Oxford was the least affordable, with a ratio of 9.66.

The findings come after the UK government unveiled a new multi-billion-pound scheme in the budget, aimed at helping home buyers get on the property ladder or move up it with a 5 per cent deposit.

Help to Buy has been given a cautious welcome as a way of kick-starting the market, but the government has been warned the scheme must not create another “housing bubble”.

Surveyors and lenders have reported signs of confidence returning to the market following the launch of another government scheme last August called Funding for Lending, which has prompted lenders to slash their mortgage rates and the number of mortgages on the market to increase by around one third.