According to the recent PwC Economic Outlook, the average house price in Scotland is expected to grow by 14% between 2018 and 2022 to hit £170,000 – if no deal Brexit is avoided. The research also found that Scotland is one of the most affordable places in the UK to privately rent a home.
Economic growth in Scotland is predicted to rise by 1.6% this year making it the second fastest growing region within the UK. However, it is predicted that this growth will drop back to 1.3% in line with the rest of the UK next year.
Based on the assumption of a No Deal Brexit, the average value of a home in Scotland will grow by 1.7% next year, 2.4% in 2020 and 4.7% in 2021 through to 2022. This will result in the average house price in Scotland rising to £170,00 from today’s figure of £149,000.
The growth rate in Scotland at present is moderate with the average house price in the UK rising by 1.4% in value from April 2018 to April 2019.
The news that house price growth in Scotland remaining steady over the next four years is welcome news for homeowners looking to move and hoping to achieve a higher selling price to help to secure the best mortgage rate. However, this does pose a challenge for first time buyers looking to get onto the property ladder and whom are most likely saving for a deposit. That said, Scotland is still one of the most affordable parts of the UK in which to rent a property with an affordability ratio of gross income spent on rent standing between 15% and 22% for key positions. Conventionally, the benchmark is that renting should cost less than 30% of gross income to be considered affordable.
It is predicted that UK growth will be more balanced across the regions as we move into 2020 with London no longer growing significantly faster than the UK average. This is partly due to Brexit uncertainty and growing constraints on London in terms of housing affordability and transport capacity.
If you are considering purchasing your first home, contact us today at The Mortgage Hub – we’re here to help.