Strong buyer affordability underpins the sales market

Sales demand

Relatively high buyer affordability across Scotland’s sales markets continues to underpin activity levels with strong home mover and first-time buyer demand in our markets. House prices are currently 4.4 times average annual earnings for Scotland, substantially lower than the UK average at 6.8 times. Furthermore, first-time buyer mortgage payments as a percentage of take-home pay are the lowest of any region in the United Kingdom (Nationwide). Home mover and first-time buyer demand in our market areas is up compared to the start of the year. Many home movers are looking to upsize; houses with three or more bedrooms in our towns and suburbs are in high demand. First-time buyers are currently seeking ready-to-move into smaller one and two-bedroom apartments, which form a key focus for those seeking citycentre living.

Strong demand for properties north of the border continues to support pricing. At present the majority of our network sales are at, or in excess of, the Home Valuation Report. Monthon-month and year-on-year price growth in Edinburgh, Glasgow, St Andrews and Aberdeenshire has softened considerably from a year ago, but as yet there is little evidence of significant price moderation (UK HPI).

Rental records

A shortage of supply and continued high demand continue to underpin rental market activity, with 75% of properties let within a week of listing. Double-digit annual rental growth for newly-agreed lets is evident in many areas. There is considerably less movement in the market as many renters are choosing to stay put.

Renter affordability in Scotland varies by area*.

22.2%

First-time buyer mortgage payments as a % of take home pay

Nationwide, UK HPI

Renters are protected by a moratorium on evictions and a 3% cap on rent rises until the end of September 2023 at the earliest. Private landlords can apply to Rent Service Scotland to increase rents to cover up to 50% of increased costs relating to mortgage interest payments, insurance premiums and service charges, to a maximum of 6%. Across Scotland the median proportion of gross income spent on rent is currently 22.8%, slightly higher than the five-year average (22.1%). The current median income of a renter is just shy of £29,000 (DRMA). There are however distinct variations, reflecting the specific natures of our market areas.

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