There are warnings owning a home is becoming a “distant dream” for many Scots as prices soared during the pandemic despite wages stagnating.
Average house prices in Scotland have risen by 20% since the start of the pandemic – from £151,856 in March 2020 to £181,415 in March 2022.
In Glasgow, over the same period, average house prices increased 24.3% rising from £133,368 to £165,805; There was an increase in Edinburgh of 14.8% from £274,512 to £315,070; up 13.9% in Dundee from £123,029 to £140,218; and an increase of 2.4% in Aberdeen from £141,192 to £143,591.
The chief executive officer of DJ Alexander Ltd, part of the largest lettings and estate agency in the country, has questioned how long rises can go on for.
“Brakes are being applied across the economy in terms of rising interest rates, higher utility bills, increased living costs, and rising inflation so it is clear that many of the elements which have contributed to this boom have, or are, rapidly disappearing,” David Alexander said.
Meanwhile, the median wage has fallen slightly by £181, amounting to a 0.5% drop, Scottish Labour said.
Last year’s average wage was £31,659 compared to £30,000 in 2019, according to Nomis, which provides official labour market statistics.
House prices have almost trebled since 2002, with the average price rising by more than £100,000, amounting to a 175% increase.
But over the same period, wages rose by just £12,500 – or 66%.
Scottish Labour’s housing spokesperson Mark Griffin has urged the Scottish Government to step in to stop a generation of Scots “being frozen out” of the housing market.
Griffin said: “For far too many people home ownership is becoming a distant dream, as the yawning gulf between house prices and earnings grows by the day.
“Scotland’s broken housing market has been spiralling out of control for years while the SNP failed to act, instead letting things escalate to crisis point.
“We see spiralling house prices, soaring private rents and shameful social housing waiting lists. Every part of Scotland’s housing market is creaking under the weight of SNP incompetence.”
A Scottish Government spokesman said the country continued to “be a good place to buy a first home, with the average first-time buyer spending nearly £100,000 less for a property than in England”.
“We are supporting home ownership through our Lift scheme, which helps people on low-to-moderate incomes to buy their first home and our first-time buyer relief for land and buildings transaction tax has the effect of raising the nil-rate threshold from £145,000 to £175,000, saving first-time buyers up to £600,” the spokesman said.
He added: “Scotland has led the way in the delivery of affordable housing across the UK with more than 108,100 affordable homes delivered since 2007, over 75,000 of which were for social rent.
“We want to ensure everyone has a warm, affordable home that meets their needs, which is why we have committed to delivering another 110,000 affordable homes by 2032, of which at least 70% will be available for social rent and 10% will be in our remote, rural and island communities.”