First time buyers 'need £100,000'

http://news.bbc.co.uk/go/rss/-/1/hi/scotland/6217353.stm

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The average price that a first time buyer paid for a home in Scotland went above £100,000 for the first time in 2006, a survey has shown.

The Bank of Scotland research found that the cost increased by 17% to £108,922, up from £92,842 in 2005.

Over the past five years this represented a doubling in the average price from £52,377 in 2001.

The least affordable town in Scotland was Helensburgh, while the most affordable was Lochgelly.

LEAST AFFORDABLE TOWNS BY PRICE-INCOME RATIO Helensburgh, DunbartonshireEdinburgh, MidlothianTranent, East LothianInverurie, AberdeenshireAyr, Ayrshire <i>Source: Bank of Scotland</i>

Despite the increases, Scotland still remained the cheapest part of the UK for first time buyers, well below the £151,565 overall average.

Scottish buyers put down an average deposit of £21,290 in 2006, according to the study, about 20% of the property value.

Calculations of affordability, done on a price-to-income ratio, showed that buying a house had moved out of reach for most people starting on the property ladder, while flats remained affordable in most locations.

The number of towns where buyers could afford a house, based on 47 locations, fell from 91% in 2001 to 11% in 2006.

MOST AFFORDABLE TOWNS BY PRICE-INCOME RATIO Lochgelly, FifeCumnock, AyrshireBellshill, LanarkshirePeterhead, AberdeenshireWishaw, Lanarkshire <i>Source: Bank of Scotland</i>

However, a typical first time buyer could still afford a flat or maisonette in 87% of towns surveyed.

Tim Crawford, group economist at the Bank of Scotland, said: "First time buyers in Scotland are finding it increasingly difficult to climb onto the property ladder with the average house price paid by a new buyer entering the market now above £100,000.

"This is more than double the price level of five years ago.

"The situation for first time buyers, however, is better than elsewhere in the UK with lower average prices and the typical first time buyer able to afford the average flat in the majority of towns."