The number of people living in Scotland represents no more than 10 per cent of the population of the United Kingdom.
Yet it would appear that four-fifths of the ten most affordable local authority districts for first-time buyers in Great Britain and Northern Ireland are located north of the Border.
This is the remarkable conclusion from the latest research into first-time buyer trends from lender Halifax. If you were to believe initial media reaction to the results, it would seem that the research had uncovered yet another remarkable statistic – that, contrary to trends in other parts of the UK, the number of first-time buyers in Scotland (and in Wales) had actually fallen between 2007 and 2017, which was the period covered by the research. Actually, if you examine the tables, they tell us that the number of first-time buyers in Scotland in 2017 was 35,577, compared with 35,400 ten years earlier. A modest increase, admittedly, but this compares with a slump to 19,500 in 2012.
The average deposit for first-time buyers in Scotland is said to be £21,460, or 15 per cent of the average first-time buyer price of £140,010. The average age of the first-time buyer here rose from 28 to 30 during the period covered, but was still slightly below the UK average of 31 years.
According to the Halifax, the most affordable areas for first-time buyers in Scotland are West Dunbartonshire, Renfrewshire, Inverclyde, North Ayrshire, East Ayrshire, South Ayrshire, North Lanarkshire and Stirling. The ratio of house price to average earnings (again, for first-time buyers) in each area ranges from 3.0 in Stirling to 3.4 in North Lanarkshire.
The two other most affordable locations in the UK are both in North-west England – ie Copeland (on the Cumbrian coast) and Pendle, Lancashire. Meanwhile, all of the ten least affordable local authority districts for first-time buyers are Greater London boroughs – with ratios of house prices to average earnings ranging from 10.5 in Ealing to 12.9 in Brent. In other words if you want to buy a house within sight of Wembley Stadium you will need to earn almost four times as much than if you want a house with a view of Stirling Castle.
Frankly, I find the inclusion of Stirling surprising. True, the city and surrounding district has its fair share of low-cost housing in former local authority estates and fairly remote rural areas. But in my professional experience, Stirling itself is much sought-after by homebuyers, given that its residents enjoy the benefit of excellent motorway and rail links to Edinburgh and Glasgow for the daily commute, coupled with some fantastic scenery on their doorsteps. And let’s not forget it is also a university town, a fact that affects first-time buyer prices wherever you are in the UK.
Significantly, Glasgow (that’s the city proper without posh suburban add-ons like Bearsden and Newton Mearns) is not included in the affordability table despite having huge swathes of low-cost flats in traditional tenement areas, for example. Both there and in Edinburgh, first-time buyers have found themselves in competition with investment landlords, many of whom who have switched their interest from higher and middle-priced properties to lower-value stock, the reason being to A, avoid draconian rates of Land and Buildings Transaction Tax (LBTT) at one end and B, take advantage of low or zero LBTT at the other.
It could, of course, be argued that the relatively-high incidence of first-time affordability in certain parts of Scotland suggests that LBTT (with its emphasis on zero or low rates for the cheapest housing) is beginning to work in the interests of the lower-paid. The only problem is that these first-time buyers who eventually wish to move up the ladder will find their choices limited because LBTT, as it is currently structured, is simply not working in the interests of the market as a whole – nor, for that matter, in the government’s interests as regards tax take.
David Alexander is MD of DJ Alexander