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Scottish first-time buyers paying almost £190,000 to get on housing ladder


25 January 2023

  • Number of first-time buyers dropped 11% last year, following 2021’s record high
  • Average house price for first-time buyers up 9%, to £189,428
  • First-time buyer average deposit now £41,442, up 8% on previous year
  • West Dunbartonshire is UK’ most affordable place to buy a first home


The number of first-time buyers fell by 11%, to 31,184 in 2022, compared to the year prior, according to new analysis from Bank of Scotland.

First-time buyers in Scotland now need to put down an average deposit of £41,442, paying £189,428 to get on the property ladder. Despite these significant sums, those buying their first home make up half (50%) of all home loans.


Table 1: Number of First-Time buyers in Scotland.

  Number of first-time buyers Annual % change First-time buyers as % of all home purchase loans
2012 18,610 15% 41%
2013 22,920 23% 44%
2014 27,550 20% 47%
2015 28,430 3% 46%
2016 30,660 8% 50%
2017 33,560 9% 50%
2018 32,480 -3% 50%
2019 32,630 0% 49%
2020 28,740 -12% 51%
2021 35,030 22% 50%
2022* 31,184 -11% 50%

Sources: UK Finance and Bank of Scotland* estimate for 2022

Table 2: First-time buyers: Average price and deposit by UK region, 1 year change 2021

  Average House Price 2021 (£s) Average House Price 2022 (£s)

Average Deposit 2021 (£s)

 Average Deposit 2022 (£s) Deposit as % of purchase price 2022 1 Year % change in Deposit 
 1 Yr % change in Average Price 
Scotlland 173,970 189,428 38,468 41,442 22% 8% 9%
East Midlands 215,611 238,208 41,058 42,451 18% 3% 10%
East of England 307,614 336,710 61,113 60,169 18% -2% 9%
London 475,498 518,900 122,348 125,378 24% 2% 9%
North East 161,699 175,091 30,521 30,198 17% -1% 8%
Northern Ireland 159,107 171,425 29,912 33,199 19% 11% 8%
North West 194,175 212,604 37,194 37,483 18% 1% 9%
South East 327,406 362,730 67,569 68,749 19% 2% 11%
South West 256,320 281,167 54,507 55,708 20% 2% 10%
Wales 187,390 199,359 37,179 36,825 18% -1% 6%
West Midlands 214,438 235,108 40,205 42,339 18% 5% 10%
Yorkshire and The Humber 182,747 202,154 34,139 37,062 18% 9% 11%
UK 268,031 302,010 57,883 62,470 21% 8% 13%

Source: Bank of Scotland 12 months to December 2022

The latest analysis also found that the average age of buyers entering the Scottish housing market is 31 – slightly lower than the national average of 32.

Graham Blair, Mortgages Director, Bank of Scotland, said: “There was a real spike in demand for Scottish homes in 2021 which means it’s unsurprising that the amount of properties bought by first-time buyers fell back in 2022, by 11%. Nonetheless, those getting on the property ladder for the first time still make up half of all home loans, and they’re paying almost £190,000 to get that first property. With average deposits raised now over £40,000, it’s still a significant challenge for people, although Scotland does have some of the most affordable places to buy in the UK.”

 

Affordability

Average property values for first-time buyers are now around 5.0 times the average Scottish salary (£37,940.)

Compared to the rest of the UK, Scotland has some of the most affordable places for people to make the first step on the housing ladder. The majority (six) of the top 10 most affordable areas in the UK are in Scotland.

The most affordable area for first-time buyers in Scotland, as well as the UK, is West Dunbartonshire. Comparing the average earnings in West Dunbartonshire (£37,910) to the average first-time buyer house price in the area (£103,957) – those getting started on the property ladder need to borrow roughly 2.7 times the average salary to get on the property ladder.

The least affordable area in Scotland is East Lothian, where first-time buyers face average house prices of 4.5 times Scottish average salaries.

More generally, the data from Bank of Scotland also found that almost two thirds (63%**) of mortgage completions in the UK are now made in joint names (with 2 or more people).

Table 3. FTB affordability in Scotland

Local Authority District House Price to Average Earnings ratio
West Dunbartonshire 2.7
Inverclyde 2.8
North Ayrshire 2.9
East Ayrshire 3.0
South Ayrshire 3.1
Clackmannanshire 3.1
Stirling 3.2
North Lanarkshire 3.2
Renfrewshire 3.3
South Lanarkshire 3.4

Source: See Notes to Eds

Table 3. FTB affordability in Scotland

Local Authority District House Price to Average Earnings ratio
East Lothian 4.5
Aberdeen City 4.4
City of Edinburgh 4.4
Aberdeenshire 4.4
Midlothian 4.3
Dundee City 4.1
Highland 4.1
Moray 3.9
Scottish Borders 3.9
West Lothian 3.9

Source: See Notes to Eds

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