I was recently travelling back from undertaking a home report survey for a potential seller when statistics in a radio news report caught my ear.
It concerned the pressures on Scotland’s first-time buyers and noted that while wages over the past 20 years have risen approximately 112%, over the same period average property prices have risen over 200%! Furthermore, while first-time buyers grapple with the cost of living, many saving for a deposit for their first home are challenged by Scotland’s average rental prices.
In fact, the latest UK House Price Index Scotland (February 2024) shows that while on a non-seasonally adjusted basis, average property prices in Scotland decreased by 0.6% over the period Jan-Feb 2024, it increased by 5.6% over the 12-month period February 2023-February 2024. This means the average price of a property is around £188,000.
Consequently, as mortgage rates by some major lenders creep upwards, it’s little wonder that the average age of a first-time buyer north of the border is now over 30.
Property snakes and ladders
Based on the above it’s clear that first-time buyers in particular face difficulties climbing the property ladder, especially in cities where there tends to be a greater concentration of job opportunities but generally higher property prices and rents. The latter serves to further eat into potential savings for that all-important property deposit that can easily be over £20,000.
Therefore, the conundrum for first-time buyers is to balance securing an affordable property with one that offers quality of living and a reasonable commute to work.
Of course, the challenges for first-time buyers can have a knock-on effect on the wider cyclical property market. After all, if a young first-time buyer can’t secure their property, they are later to acquire a larger flat or family house and that in turn can affect those older sellers who hope to downsize.
Where to buy – and sell
As ever, there are winners and losers in this endless property cycle of snakes and ladders. It continues to be a tough period for first-time buyers but in various parts of the country and particularly in the Central Belt I have surveyed many properties that are commanding strong values – and sell.
So where is that value for money for the first-time buyer? Note that the average price for a flat or maisonette in February 2024 was up 4.7% to £129,000 compared to £123,000 in February 2023. According to the UK House Price Index Scotland (February 2024), first-time buyers are paying on average £150,000 to get their foot on the property ladder.
Even a cursory glance at the stats reveals that the City of Edinburgh continues to command high average property prices with an average of £325,000 in February 2024. Across the M8, the City of Glasgow average prices for the same period have risen over 5% to £173,000. Between these cities, the local authority area of West Lothian (up 4.6% to £214,000), North Lanarkshire (up 3.4% to £134,000) and South Lanarkshire (up 4% to £164,000) are also benefiting the home seller more than the hard-pressed buyer.
However, with average property prices at £134,000 the North Lanarkshire area is still a potential hunting ground for the first-time buyer when you consider that the national average paid by that market is £150,000. Equally, though home sellers in the Inverclyde area will welcome the 13.8% annual hike in average property prices in that local authority area, the average of £126,828 may still provide scope for the first-time buyer. Indeed, according to the latest stats, Inverclyde remains the most affordable local authority area in which to buy a property in Scotland.
Overall, a glance at the latest figures shows negative annual average property prices (and only marginal) in only four local authority areas in February 2024 – Fife, Stirling, Aberdeenshire and Argyll and Bute.
If securing a detached home is your goal, despite the overall market challenges it would appear that’s a sector where prices remain strong with a 7.3% increase to £338,000 over the period February 2023-2024. That’s potentially great news if you are a potential property seller of a detached home who is preparing to commission a professional home report!
If you have any questions about buying or selling property or would like to ask us for more information, call 0131 608 0175 or email info@homereportcompany.co.uk.
