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Finance News |
Homeowners would 'struggle' to cope with rise in interest rates
Sunday, February 06 13:05:38
The average price paid by first-time buyers in Scotland increased by 18% in 2004, from £70,085 in 2003 to £82,654 in 2004. First-time buyers UK-wide saw an increase in prices of 16% to £131,024.
The affordability difficulties confronting them have significantly reduced new entrants to the housing market. About 32,000 new buyers bought houses in 2004 - around 18% down on 2003 and more than a third lower than in 2002. It was the lowest annual total in nine years.
This compares with the UK-wide figure of 361,000 in 2004, which was a 20-year low.
Edinburgh and Glasgow had become unaffordable for first-timers buyers but there were still towns within commuting distance which remained within financial reach.
Most of the unaffordable towns were in the Lothian, Strathclyde and Grampian regions.
"Affordability has now become a serious issue for people looking to get on to the housing ladder for the first time in Scotland and it is not just confined to the south of England," said Crawford.
"This is highlighted by the sharp decline in the number of first-time buyers in Scotland in 2004 to the lowest level in nine years."
Lochgelly is the most affordable town in the UK for a first-time buyer, with an average property price three times higher than a first-time buyer’s average income. The three most inexpensive towns for Scottish first-time buyers are in Fife, while Strathclyde also includes several affordable towns.
Crawford believes there is some light at the end of the tunnel. He expects the situation to improve as earnings growth outstrips house price growth over the next few years. This will make it easier for first-time buyers, he said.
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