Aberdeen City takes the top spot as the most affordable local authority area in Great Britain. Here 31.0% of potential first-time buyers can afford the average first-time buyer home in Aberdeen City.
This is then followed by Aberdeenshire (28.2%), Na h-Eileanan Siar (25.1%), Argyll and Bute (25.0%), Scottish Borders (24.8%), Inverclyde (24.6%), Angus (24.4%), Shetland Islands (24.2%) and West Dumbartonshire (22.9%).
By contrast, Ceredigion in Wales takes the bottom spot as the least affordable local authority area in Great Britain. Here only 2.7% of potential first-time buyers can afford the average first-time buyer home in Ceredigion.
Scottish local authority areas perform well due to their relatively low property prices which, at £162,000 in Q4 2024, are 35% below the national average. However, despite this relative affordability, homeownership remains a challenge, with only 3 in 10 potential first-time buyer households in Aberdeen City financially able to step onto the property ladder.
As well as measuring the affordability to buy a property, Skipton Group’s Index also measures the affordability of running one too. Across Great Britain a large proportion of potential first-time buyers (those currently renting) also face a living affordability challenge, with almost 40% finding themselves in an unaffordable housing situation. This is where their total housing costs account for more than 45% of their household income. Six local authority areas in Scotland feature in Britain’s top ten rankings for having the lowest proportion of households spending over 45% of their income on housing costs – driven predominantly by lower rental prices in Aberdeenshire, Shetland Islands, Midlothian, Na h-Eileanan Siar, Moray, and Highland.
While a review of Scotland’s Land and Buildings Transaction Tax (LBTT) legislation is due to take place this year, Skipton Group’s Index reveals how LBTT is having an impact on first-time buyers wanting to make Scotland their home. In 2018, only 3% of local authority areas in Scotland had average first-time buyer homes liable for the tax. Today, that proportion stands at 34%, and is forecast to rise to over 40% by the end of 2027.
Further insights from the Home Affordability Index, which now includes new local authority-level data covering 363 areas across Great Britain, include:
In the most affordable Scottish local authority areas, potential first-time buyers are around eight times more likely to be able to take the first step on the property ladder than those in the least affordable.
6 of the 10 least affordable areas for first-time buyers are in Wales whereas Scotland dominates the most affordable areas, with only the City of Manchester area bucking this trend.In Aberdeen City ―the most affordable local authority area across Great Britain―3 in 10 potential first-time buyers can take the first step on the property ladder. This drops to just 3 in 100 in Ceredigion, the least affordable.
Almost 90% of potential first-time buyers across Great Britain cannot afford to buy a first-time home in their local area based on their personal financial situation.
4 in 10 potential first-time buyers in Great Britain are spending over 45% of their income on essential housing costs.
The Impact of Government Schemes
The report also highlights issues surrounding the Lifetime ISA (LISA), a scheme designed to help first-time buyers save for a deposit. By 2027, the fixed LISA house purchase limit of £450,000 will fall below the average first-time buyer property price in more than 1 in 10 local authority areas in Great Britain. This could leave thousands of LISA savers unable to use their savings without incurring a penalty, undermining the scheme’s original intent.
Stuart Haire, Skipton Group CEO, said:
“The findings from Skipton Group’s Home Affordability Index highlights the stark reality facing Scotland’s first-time buyers. I have the pleasure of living in Scotland and calling it my home. And while our country is home to some of the most affordable local authority areas in Great Britain, affordability on paper is not translating into accessibility in practice. The fact that only 3 in 10 potential first-time buyers in Aberdeen City, Britain’s most affordable area—can take their first step onto the property ladder is deeply concerning.
“The first step onto the property ladder remains by far the hardest with almost 90% of potential first-time buyers across Great Britain being unable to afford to buy their own home in their local area. We must address the financial barriers preventing young people and families from affording a home, whether through targeted support, reforms to property taxes like LBTT, or a review of government schemes designed to help more people onto the housing ladder – such as the Lifetime ISA – which risk becoming as obsolete as a fax machine if house prices continue to grow.
“Homeownership should be an achievable goal, not an increasing challenge, and we need to be knocking down some of the barriers standing in people’s way to ensure Scotland’s affordability translates into real opportunities.”