Glasgow has UK’s most affordable property prices

28/08/2019 08:47:37

Glasgow has the most affordable housing market in the country, according to newly published data.

The latest UK House Price Index shows house prices most in line with average earnings in Scotland’s biggest city today and over the past 20 years.

Glasgow also recorded one of the highest levels of house price inflation over the past 12 months, reflecting recent growth in the housing market contrasting with a slowdown in London and the South-east.

UK house price inflation ranged from 6% in Edinburgh and Liverpool to -5% in Aberdeen whose market continues to suffer from a collapse of the oil and gas industry.

According to the report, Glasgow has a house-price-to-earnings ratio of 3:7, compared with a high of 13:1 in London. The Scottish city is one of just four in which the current ratio is lower than its 20-year average of, 3:8.

Craig Smith, Director of Scottish Property Centre Shawlands, said Glasgow and its surrounding areas, including Lanarkshire and Argyll and Bute, are currently experiencing a sweet spot of affordability and price growth.

“Glasgow is currently one of the most desirable places in the UK to live because of its enviable combination of relatively high incomes and affordable housing.

“In the past couple of years Scotland has overtaken London and the South-east as the main centre of price growth, reflected in rising property values of around 5%.

“This means there are currently benefits to buyers and sellers who will both find encouraging news in this latest set of figures.”

According to the report, affordability levels are improving in the UK’s highest value cities, although it makes clear this could be a drawn-out process.

It said: “Housing affordability remains attractive in many cities across the UK, pointing to the potential for further price growth over the medium term as long as mortgage rates remain low and the economy continues to grow and create jobs.

“How fast attractive affordability feeds into house price inflation depends upon consumer confidence and market sentiment. House price growth has slowed more recently on weaker activity and increased uncertainty over the near-term outlook.

“This is likely to build further over the autumn until there is greater clarity over the Brexit process and the implications for the economy.”

Buying power is boosted by lower mortgage rates over time - today’s mortgage rates of c.2% are more than half the level recorded in 2007 (5.5%) and lower still compared to the mid-1990s.

The picture of affordability in London is complicated by its global city status and broad base of housing demand from international buyers, investors, second homeowners as well as residents living and working in and around the capital.

There are eight cities where the current prices to earnings ratio higher than in 2007 with the greatest differential in London, Oxford and Cambridge. Twelve cities have ratios below 2007 levels with seven where the ratio is materially lower, typically in cities with lower capital values.

For more information on house prices in your area contact your local Scottish Property Centre branch or visit www.scottishpropertycentre.net

 

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