Property in Scotland’s cities is becoming increasingly less affordable, according to the latest Bank of Scotland Affordable Cities review.

Stirling is the Most Affordable City

The review found that the average Scottish city house price has risen by almost 3%, from £181,061 in 2016 to £186,002 in 2017, a faster increase than the 1% for the whole of Scotland. This has resulted in average home affordability in Scotland’s cities worsening in the last 12 months from 5.2 to 5.3 times gross average earnings; the fourth successive annual decline in home affordability. 

This increase in house prices means that home affordability in Scottish cities is now, on average, at its worst level since 2009 and is slightly worse than in Scotland as whole, where the ratio is 5.1.

Stirling is apparently not only Scotland’s most affordable city, but also the most affordable city in the UK. At £173,848, the average property price in this city is 3.7 times average gross annual earnings, which is significantly lower than the UK cities average of 6.9.

Perhaps unsurprisingly, Edinburgh is Scotland’s least affordable city, with its average house price of £236,136 equating to is six times annual gross average earnings. Edinburgh is joined in the list of top five least affordable cities in Scotland by Aberdeen (5.7 times annual gross average earnings), Perth (5.7), Dundee (5.5) and Inverness (5.5).

Oxford is the UK’s Least Affordable City

Across the UK as a whole, Oxford is apparently the least affordable city. It carries an average house price of is £385,372, which is nearly 11 times (10.7) annual gross average earnings in the city (£36,033).

The review found that there are five cities with average house prices at least ten times average annual earnings. In addition to Oxford, these are Greater London (10.5), Winchester (10.5), Cambridge (10.3) and Chichester (10.0).

Londonderry in Northern Ireland is the UK’s second most affordable city, with an average property price equating to 3.8 times annual gross average earnings in the city. Two other Northern Ireland cities, Belfast (4.6) and Lisburn (4.8), are placed 4th and 6th respectively within the ten most affordable cities.

Northern English, Scottish and Welsh cities make up the remainder of the ten most affordable cities - Bradford (4.4), Hereford (4.7), Sunderland (4.9), Durham (5.0), Glasgow (5.2) and Swansea (5.2).

Perth Experiences Biggest Price Rise

Perth has apparently recorded the biggest price rise of any Scottish city over the past decade, with a gain of 31% between 2007 and 2017, compared to the UK cities average of 21%. Edinburgh, Inverness and Aberdeen had the next highest price rise, with all seeing a gain of 16%. 

“Homebuyers in Scotland’s cities have seen affordability levels worsen for the fourth consecutive year as average city house prices have continued to rise more steeply than average wage growth,” explained Graham Blair, Mortgage Director at Bank of Scotland. “However, the average price to earnings ratio in Scotland’s cities is 5.3 - lower than the UK cities average of 6.9.”

“Its little surprise that Edinburgh retains its title as Scotland’s least affordable city, with Aberdeen and Perth close behind,” he added. “Stirling now takes the top spot as the UK’s most affordable city, as well as Scotland’s.”

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