Scottish housing ladder 'tougher to climb'

The affordability measure for second steppers was 4.3 times gross annual average earnings in October

A report has suggested it is now harder to move up the housing ladder in Scotland than to get on it.

The Bank of Scotland homemovers review indicated those looking to buy their second home faced the least favourable level of housing affordability for a quarter of a century.

It concluded "second steppers" were now worse off in terms of affordability than first-time buyers.

The review said the drop in house prices since 2007 was to blame.

However, it suggested Scotland was the third most affordable part of the UK for second steppers.

The review's affordability measure for second steppers stood at 4.3 times gross annual average earnings in October.

This was the highest ratio since records began in 1987 and well above the long-run average of 3.2.

The affordability ratio for first-time buyers in October was 3.5.

According to the bank, the deterioration in affordability for second steppers has been driven by a decline in levels of equity as a consequence of the drop in house prices in recent years.

The average price paid by a first-time buyer in Scotland has fallen by 14% since the peak of the market in 2007.

Homeowners who bought in that year are estimated, on average, to be in a positive equity position of just £4,000.

Bank of Scotland housing economist Nitesh Patel said: "The deterioration in home affordability in Scotland over the past few years has been significant among those looking to take their second step on the property ladder.

"This reflects the impact of the decline in house prices since 2007 on the amount of equity those who bought for the first time at the peak of the market have in their homes.

"As a result, many are faced with a tough challenge to make their next move on the property ladder."

Despite the worsening in affordability, the survey suggested Scotland was the third most affordable part of the UK for second steppers.

The South East of England was the least affordable UK region, followed by London.