A recent report by online estate agency Hatched has cast a very interesting light on the UK property market for first-time buyers. The survey produced a top 10 of most affordable places in the UK for first-time buyers and the Scottish housing market featured five times in this list. Is this a reflection of value in the Scottish housing market or deep-rooted concerns about the future?
Most affordable places for first-time buyers
Burnley was number one on the list with the Lancashire town having an average house price of £70,311. Even if we take the most pessimistic of average UK house prices, as there are a number of different calculations, this is well below half of the average. However, what is most startling about this list is the fact that Scotland features five times in the top 10.
The five most affordable places in Scotland include East Ayrshire at £74,687, Na h-Eileanan Siar at £77,523, North Ayrshire at £82,162, West Dunbartonshire at £83,195 and last but not least North Lanarkshire at £83,273. It will come as no surprise to learn that all of the top 10, bar Blaenau Gwent in South Wales, are either in the North of England or Scotland. This perfectly illustrates the north-south divide which has been growing significantly for many years now.
First-time buyer market
On the whole UK first-time buyers are struggling to climb onto the property ladder which is no surprise when you read that the latest Nationwide average UK house figure is £211,671. If this is the average, and the North of England is significantly below this, it does make you wonder how properties in the Midlands and the South of England are anywhere near affordable.
When you consider that many first-time buys have been complaining of a lack of affordable property this latest average figure from the Nationwide perhaps cast more light on this issue. The problem is that matching affordable property in a particular area as well as taking in employment opportunities is a calculation which is extremely difficult to balance. On one hand we have affordable property but limited employment opportunities, while on the other we have good employment opportunities but unaffordable housing. A massive quandary for the UK housing market!
Rental market
While there will be first-time buyers picking up property in areas such as Burnley, and some of the Scottish towns and cities mention, the need for rental property in London and other employment hotspots will push prices higher and higher in the long term. At the moment it is difficult to see the North of England and Scotland closing the gap between average house prices in the Midlands, London and the South of England. Many people had expected employers and employees to look outside of London and the South of England, most definitely the employment hub of England, but so far this has not really happened.
It is also worth noting that while the government has attempted to implement further taxes on buy to let investors, at some point tenants will pay the price with higher rents. The simple fact is there is an acute housing shortage in many areas of London and the South of England and those looking to rent will simply have to pay higher prices. The alternative is that buy to let investors withdraw their funds, the housing shortage becomes ever more acute pushing prices to levels which are literally unsustainable.