We like to keep you regularly updated with all the latest goings on in the Scottish property market here at Edinburgh Self Storage and remember that if you’re moving house, we offer the perfect self-storage facility for you that’s secure and flexible.
Inflation and affordability
The latest figures from the Office of National Statistics reveal that UK-wide property inflation increased 12.4% in the year to April, up from 9.8% growth in March.
This is all against a backdrop of UK housing affordability now at its most stretched, as property price inflation outstrips earnings.
The good news is that Scottish locations dominate the list of most affordable local areas: Inverclyde is the most affordable place to buy a home, with typical house prices just 3.1 times average earnings.
Average home prices
The figures from the ONS tell us that the average home was worth £281,000 in April, £31,000 higher than this time last year.
Scotland (and Wales) reported the largest growth over the year – a 16.2% rise in both countries to reach an average price of £188,000 and £212,000 respectively.
Industry reaction
Commenting on the figures, Iain McKenzie, CEO of The Guild of Property Professionals said:
“Just when it seems that house price growth is starting to slow, along come these figures showing an almost 3% rise on last month.
“The average home now costs over £30,000 more than it did this time last year, but with sluggish wage growth and lower disposable income, it may feel like the goal posts have been moved for first-time buyers.
“The market may not be running away for everyone though, with parts of Scotland and Northern Ireland experiencing lower house price inflation.
“Estate agents are still seeing an imbalance between supply and demand, with potential buyers queuing up as soon as properties come up for sale. When this eventually begins to narrow, we may see house prices cool down to more achievable levels.”
Michael Bruce, CEO and founder of Boomin, added: “It’s important to remember that while sold prices provide the most concrete health check of the UK property market, they are reported on a lag.
“So while the market remains apparently unphased by a spate of base rate jumps and consequential impact this is likely to have on the spending power of UK buyers, the reality is that this declining market sentiment is yet to bubble to the surface.
“However, while these growing economic headwinds may rock the boat of house price growth, sustained and robust levels of buyer demand, coupled with a shortage of stock, are sure to prevent a significant drop.”
First-time buyer affordability taking a hit
At a UK level, the first-time buyer house price ratio is 5.6 times average earnings, compared to home-movers at 8.5.
However, first-time buyers also saw a squeeze in affordability as prices rose quickly during the pandemic, increasing the challenge of raising a suitable deposit without the benefit of a corresponding increase in the value of an already-owned property.
A good number of first-time buyers will be joint applicants able to draw on two salaries, or might benefit from other sources of funds, like the bank of mum and dad, if they have that luxury.
Added to which, the average first-time buyer now 32 years old – three years up on a decade ago – and so they’re likely to be more established in work than at any time previously. We must therefore factor in the potential for higher earnings.
Sources:
propertyindustryeye.com
lloydsbankinggroup
