First-time house buyers double in ten years as prices rise by £41k

The number of first-time buyers in a year in Scotland has almost doubled in a decade, new analysis has revealed.

The average deposit put down by a first-time buyer increased by 13 per cent.

And the figures from the Bank of Scotland show the cost of a typical first home has soared by more than £40,000 in the past ten years.

A total of 33,558 people entered the property market in 2019 compared to 17,580 in 2009 – an increase of more than 90 per cent.

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The cost of a typical first home went up by 38 per cent in Scotland over the past ten years, climbing from £111,402 in 2009 to £152,728 last year.

First-time buyers account for 50 per cent of all housing purchases with a mortgage in Scotland, up from 38 per cent in 2009.

Ricky Diggins, operations director at Bank of Scotland, said: “We’ve seen a big uplift in the number of first-time buyers in Scotland over the last decade and they continue to account for around half of all purchases.

“This shows just how important they are to the health of the Scottish property market, a situation that’s been helped by a number of factors, including government schemes and continued low interest rates.

“Scotland also remains one of the most affordable areas in the whole of the UK, with both average prices and deposits much lower than the overall average across the four nations.”

He added: “That only tells part of the story though, with significant differences seen in many local areas, and locations such as Edinburgh and East Lothian looking more challenging for those aiming to take that first step onto the property ladder.”

The average deposit put down by a first-time buyer increased by 13 per cent over the same period from £26,427 to £29,950.

From 2018 to last year, the typical price paid by a first-time buyer in Scotland rose by 8 per cent (£10,771), while the average deposit was up by 11 per cent (£2,879).

Scotland remains one of the most affordable places in the UK to buy a first property, with only Northern Ireland at £136,850 and the north of England at £136,104 recording a lower average price for first-time buyers in 2019.

This compares to a UK average first-time buyer price of £231,455, while the average UK deposit last year for first-time buyers was £46,187.

Burnley, in the north-west of England, was identified as the most affordable area for local first-time buyers, calculated by comparing average earnings with average house prices, with a ratio of 3.1.

But six of the ten most affordable locations were all in Scotland, with North Ayrshire, East Ayrshire and Inverclyde all recording a ratio of 3.3. Renfrewshire, Stirling and South Ayrshire were only slightly more expensive, with a ratio of 3.5.

The least affordable was Hackney in London, with an average house price-to-earnings ratio of 12.1.

Midlothian was the least affordable area for first-time buyers in Scotland. An average first home in the area last 
year cost £174,033, with a house-price-to-earnings ratio of 5.2.

Russell Galley, managing director at Halifax, said: “The level of inflation facing first-time buyers is greater, which compounds the challenge in raising bigger deposits.

“However, given their importance to the market as a whole, it’s reassuring that the overall number of new buyers getting on the ladder remains stable.”