Number Of First-Time Housing Buyers Falls In Scotland

The number of first-time buyers in Scotland fell by 14% between January and August 2023,

compared to the same period in 2022, according to the latest Bank of Scotland First-Time Buyer Review.

This fall is not as sharp as the picture for the UK overall, where first-time buyers fell by 22%.

First-time buyers in Scotland still accounted for half (50%) of all home loans agreed between

January and August this year, the same proportion as in the same period in 2022 and 2021, as activity in the wider housing market slowed. Various challenges in the housing market, including increases to mortgage rates and periods of lower availability of mortgage deals - will have impacted many first-time buyers in recent months. Inflation has become a further barrier to saving a deposit – an aspect of new home ownership that was already difficult for many, considering the average deposit needed is now £38,871.

Graham Blair, Mortgages Director, Bank of Scotland, said:

“Scotland offers some of the most affordable places for those looking to buy their first home, with Inverclyde, West Dunbartonshire and Ayrshire the most affordable places in Scotland and the UK overall."

“While lenders are ready to help – we provided around £5.5 billion in lending to first-time buyers in the first half of this year – it doesn’t change the fact that those buying their first

property continue to face challenges. While the average deposit raised has dropped slightly compared to last year, at nearly £39,000, it is still a sizeable amount to get together and, overall, first-time buyer numbers fell in the first half of this year, compared to last year."

“However, the expected further fall in house prices this year - alongside stronger income

growth - may somewhat offset higher interest rates, which will be welcome news to first-time

buyers. Overall, Scotland continues to be a great option for first-time buyers, with the average

first property coming in at just under £100,000 less than the UK average.”

While the number of first-time buyers has fallen between January and August of this year

compared to the same time last year, a large number got on the ladder over the previous

two years as, post-pandemic, buyers took advantage of low interest rates and government

help available at the time, including Land and Buildings Transaction Tax relief and Help to

Buy schemes. This means that, between January and August this year, the average

number of people entering the property market for the first time was 22% higher than ten

years ago.