HOUSE prices in Scotland are expected to grow by 14% over the four years, a survey has found.
The average price will grow between 2018 and 2022 to reach £170,000, according to PwC’s latest UK Economic Outlook, which also reveals Scotland to be one of the most affordable parts of the UK for private rental.
This latest survey predicts economic growth in Scotland of 1.6% in 2019, making it the second fastest-growing of the nations and regions of the UK.
Looking ahead to 2020, growth in Scotland will drop back to 1.3%, in line with the UK as a whole.
Assuming the UK avoids a disruptive no-deal Brexit, the average value of a house in Scotland is expected to grow 1.7% in 2019, increasing to 2.4% in 2020 and a further 4.7% through 2021 and 2022.
This means the average house price in Scotland will increase from £149,000 today to £170,000 by 2022.
The current growth rate is moderate in relative terms, with the average house in the UK increasing in value by 1.4% in the 12 months to April 2019, led by a 6.7% increase in Wales.
Stewart Wilson, head of government and public sector for PwC in Scotland, commented: “House price growth in Scotland looks set to remain steady over the next four years, though this is influenced in real-terms by inflation and wage growth levels.
“For homeowners looking to move, achieving a higher selling price can help with mortgage terms, however faster growth presents a challenge to first-time buyers looking to make that important first step onto the property ladder.”
The outlook also reveals Scotland to be among the most affordable parts of the UK for private rental. The rental affordability ratio, which is the percentage of gross income spent on rent, in Scotland ranges between 15% and 22% for key professions including police officers (15%) social workers (17%), primary and nursery teachers (18%) and nurses and midwives (22%).
The conventional benchmark determines that renting must cost less than 30% of gross annual income for it to be considered affordable.
Wilson continued: “The affordability of private rental in Scotland could lure more key workers north, particularly given that up to 45% of income can go on rent in London, while other parts of England are above the 30% threshold and deemed affordable.
“While hotspots like Glasgow and Edinburgh will be more expensive than other areas, the figures do indicate benefits for social mobility in Scotland.”
Wilson added: “Our growth projection for Scotland of 1.6% is ahead of the UK’s 1.4%.”
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