Workers on average earnings ‘priced out of housing market’ in 21 council areas
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The GMB union has called for a “massive” housebuilding programme to get underway “without delay” after a report by the union found that workers on average earnings in Scotland are priced out of the housing market in 21 out of 32 local authority areas.
Published yesterday, the report shows current average house prices in the country are between 3.7 and 7.6 times average earnings.
According to the report, the average house price in July 2016 in Scotland as a whole was £143,711 which is 5.2 times the average full time earnings of £27,732. House prices are rising at a much faster pace than earnings with the house price to earnings ratio now 7.8 on average across the UK. Average house prices in Scotland increased by 3.4 per cent in the year to July 2016.
The situation is most extreme in Edinburgh where average house prices are 7.6 times average earnings, 7x in East Lothian, 6.7x in Stirling, 6.6x in Perth and Kinross and 6.5x in Aberdeenshire.
A ratio of 4.5 times a borrower’s income is regarded as the maximum that banks and building societies will lend.
Set out in the table below are house price data and average earnings for all authorities in Scotland ranked by areas with the highest ratio.
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