THE Halifax Affordability Review has named six Scottish local authority areas among the top 10 most affordable in the UK – with Inverclyde the most affordable.

Topping the list, the Inverclyde local authority area has the lowest housing price-to-income ratio at 2.9 – meaning just under three years of an average salary is necessary to buy a home.

Similarly featuring among the top 10 most affordable areas are Dumfries and Galloway (2nd), East Ayrshire (3rd), West Dunbartonshire (5th), Dundee (6th), North Lanarkshire (8th) and North Ayrshire (9th) each with housing price-to-income ratios between 3.2 and 3.5.

Costliest outside of London, and the third costliest overall, was Mole Valley in the South East of England with a housing price-to-income ratio of 13.2.

However, the top 10 most expensive locations remain in London and the South East.

During the peak of the housing market’s run in June 2022, the cost of a typical UK home was £293,586, while the average annual earnings of a full-time worker were £40,196. This put the house price to income ratio at 7.3, the least affordable level recorded by the Halifax report.

Yet, over the long run, the housing price-to-income ratio in Scotland has fallen from an average of 5.6 in 2007 to 5.0 in 2023.

Kim Kinnaird, mortgages director at Halifax, said: “We don’t yet know what the ‘new normal’ looks like for mortgage rates and house prices over the longer-term.

“But we expect the market to rebalance as both buyers and sellers adjust their expectations to reflect higher costs and lower demand.

“It’s likely the gap between average earnings and property prices will narrow over time, which will be welcome news to first-time buyers in particular, especially in areas which could offer better value for money.”

However, the improvement in the overall affordability of housing costs for owners has been offset by the impact of rising mortgage rates.

The Halifax review highlighted that typical UK monthly mortgage costs have increased by 22% over the last year, from £1020 to £1249.

Scotland, with a typical mortgage repayment of £880 a month, has only the UK’s 3rd lowest regional monthly repayments in Q2 2023 falling behind the Northeast of England (£815) and Northern Ireland (£734).

However, Scotland’s typical repayment is 26% of income and therefore is tied with North East as having the most affordable mortgage for first-time buyers.