Average mortgages offered to young buyers in Edinburgh are £86,000 less than what is needed to buy a home in the city.
East Renfrewshire, East Dumbartonshire and East Lothian follow as the three next least affordable places in Scotland.
The figures were published in the latest Housing Affordability report by marketing group CACI. It revealed Dundee is now Scotland’s most affordable city for young house-hunters.
Glasgow was named as the second most affordable city in Scotland, and the ninth most affordable when all areas – not just cities – are taken into account.
The report found the Western Isles/Eilean Siar is the most affordable area overall for young buyers, followed by the Shetlands and North Lanarkshire.
Yesterday one of Scotland’s leading housing experts said many young house-hunters were trapped in a “high rent limbo” and called for more housing tenure options to be made available.
The CACI report works out the affordability of houses by looking at the “cash gap” shortfall between the mortgage required for people to purchase a home and the typical mortgage available. It utilises house prices and mortgage rates across the UK to ascertain the affordability of homes of any given area.
David Bookbinder, head of policy at the Chartered Institute of Housing Scotland, said more needed to be done to help young people unable to progress on to the property ladder.
He said: “This research … reinforces the need for a range of intermediate housing options such as shared equity for people who are ‘stuck’ in a form of high rent limbo – not being able to buy and not being able to potentially rent at the top of the market. These are people who would potentially be first-time buyers.”
Stirling is fifth in the least affordable list when all places are taken into account, and Scotland’s second least affordable city, with buyers facing a “cash gap” of £53,800. This was followed by Perth, which has a negative cash gap of £48,500.
In Eilean Siar, however, buyers are often offered mortgages which more than cover what is required to purchase a home. Average mortgages offered are £21,400 more than what is required. In Dundee, it is £2,300 more and in Glasgow £1,400.
David Marshall, business analyst at the Edinburgh Solicitors’ Property Centre, said that while Edinburgh historically tended to have higher property prices than elsewhere in Scotland, the situation was improving for first-time buyers.
He said: “Looking at figures for the last 12-18 months, we are starting to see more first-time buyers coming back to the market. The reasons for this include house prices being lower now and also that those who started saving around 2008 now have a deposit in place.”
Eileen Matthew, head of property at Miller Hendry in Dundee, said: “CACI’s analysis provides an evidence-based illustration of this property ladder problem.
“However, it is good news for prospective buyers in Dundee.”