Embargo: 00.01hrs 3 December 2006

Capital is least affordable for young people to get on property ladder

Edinburgh is the least affordable area of Scotland for young people wanting to become first-time home buyers as levels of affordability continue to worsen across the country. 

This is according to the latest annual analysis of the housing market covering every local authority area across Great Britain, published today (Sunday 3 December) by the Joseph Rowntree Foundation (JRF).

The report, The geography of affordable and unaffordable housing, highlights worsening levels of affordability, with house-price to household-income ratios for all working households now standing at record levels.

In Scotland, the house price to income ratio figures for 2005, for working people aged 20-39 on properties with two or three bedrooms, is 3.67 to 1 – that means the average house price is almost 3.7 times the average household income in that age bracket.

In the capital, people are paying almost five times (4.99) their household income for a house with nearby East Lothian (4.42) and Midlothian (4.29) the next most expensive.

In Glasgow, buyers pay 4.22 times their income for properties while in Aberdeen and Dundee the house price to income ratios are 3.72 and 3.24 respectively.

The lowest house price to income ratio is in the Shetland Isles (2.36) and on the mainland, the lowest is East Ayrshire (2.75) followed by North Ayrshire (2.82) and North Lanarkshire (2.84). In these areas, and Eilean Siar, virtually all those working households that can afford to pay a housing association rent without needing housing benefit could afford to buy at the low end of the local housing market.

The average house price in Edinburgh is £185,651 and in Glasgow it’s £134,607. The Scottish average stands at £119,344 based on an average annual household earned income of £32,558.

In Great Britain, the average house price is £165,326, the average annual household earned income is £37,989 and people are paying an average 4.36 times what they earn for a property.

The housing price data for this fourth JRF housing affordability report comes from the Survey of Mortgage Lenders. It clearly shows that in all cases the regional ratios in 2005 were higher than in 2004 and demonstrates the worsening of affordability over the year. 

The report’s author, Professor Steve Wilcox of the Centre for Housing Policy at the University of York, said:
 
“While overall Scotland remains the most affordable part of Great Britain, Edinburgh is among the least affordable areas, and affordability continues to worsen in Scotland as it does in the rest of Britain.”

For further information please contact:

Professor Steve Wilcox on 01823 323 891

Notes to Editors:

1. The full report, The geography of affordable and unaffordable housing: And the ability of younger working households to become home ownersby Steve Wilcox, is published by the Joseph Rowntree Foundation. 
2. This report builds on earlier analyses conducted for the Joseph Rowntree Foundation in 2002, 2003 and 2004. It provides analysis at local authority level of the capacity of younger working households to buy in their local housing market in 2005, for every local authority area in Great Britain (except the Isles of Scilly).
3. The report sets out average house price to income ratios, together with an analysis of the proportion of younger working households in each area who cannot afford to buy, and identifies the potential market for ‘intermediate’ housing market products and policies to assist working households with incomes at the margins to enjoy, in one form or another, access to some form of home ownership.
4. The Joseph Rowntree Foundation is one of the largest social policy research and development charities in the UK. It supports a research and development programme that seeks to understand the causes of social difficulties and explore ways of overcoming them.
5. Read the Findings summary

Issued by Nasreen Memon, JRF Head of Media Relations:
01904 615958 / nasreen.memon@jrf.org.uk