Mortgage repayments have fallen by more than two-fifths in Scotland when taken as a proportion of income
Mortgage payments have fallen from a peak of 38% in last quarter of 2007 to just 22% in the final quarter of 2012, according to research conducted by Bank of Scotland.
Lower residential property prices and reduced mortgage rates have been the main driving force behind the significant improvement in affordability.
The average monthly take-home wage in Scotland is £1,954 (GBP) while the average monthly mortgage payment is just £424 (GBP).
Typical mortgage payments for a new borrower, both first-time buyers (FTB’s) and existing property owners moving house, at the long-term average loan to value ratio (LTV) have been broadly stable at 21-22% of disposable earnings over the past two years.
This is the lowest recorded level since 2002/03 and is comfortably below the national average of 30% recorded in 1983.
Mortgage payments account for the lowest proportion of disposable earnings in Northern Ireland (20%) followed by Scotland (22%).
This is relatively low when compared with the UK average of 28%.
Seven of the ten most affordable local authority districts in the UK are in Scotland
West Dunbartonshire is the most affordable local authority district in Scotland and the second most affordable in the UK with typical mortgage payments accounting for just 17.6% of average local earnings.
Other best performing areas in Scotland include:
- West Dunbartonshire – 17.6%
- Renfrewshire – 17.9%
- North Ayrshire – 17.9%
- South Ayrshire – 18.0%
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