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Affordability hits Scottish FTBs

This week we continue our round-Britain tour of the mortgage and housing markets. Halifax figures show Scottish house prices have risen 40% in the past three years and the majority of towns across the country have recorded strong increases over the past 12 months. Scotland escaped the boom and bust and resulting negative equity suffered by England and Wales in the late 1980s, and it seems likely that it will escape a crash this time round as well.

Michael Luck, managing director of estate agents Slater Hogg Howison, says a cooling at the top of the market, namely £500,000-plus homes in the suburbs of Glasgow and Edinburgh, has been balanced by strong buy-to-let and first-time buyer sectors.

But first-time buyers are not escaping scot-free. While they face fewer affordability problems than first-time buyers in England where 80% of towns are now unaffordable, their troubles are worsening. More than half the towns in Scotland are unaffordable, says Bank of Scotland, with Edinburgh, Helensburgh, Stirling, Cupar and Stonehaven the priciest. Rural areas are also becoming expensive.

And the market is expected to keep on growing, with healthy employment growth, steady demand for property and the advantages of Scotland&#39s &#39offers over&#39 conveyancing system.

Despite the different housebuying systems, lenders offer the same mortgage products on both sides of the border. Market Harborough is developing a product exclusively for the Mortgage Intermediary Alliance Scotland. And, as we reveal on page four, MIAS has launched a dedicated mortgage club primarily for Scotland-based intermediaries, soon to be followed by a network. Director Kevin Friend says MIAS sees Scotland as a country, not a region, and hopes the scheme will give Scottish brokers more choice, better service and a bespoke product.

Market Harborough has always offered mortgages in Scotland. It has never had to repossess and enjoys low arrears. This, combined with the support of MIAS, can only encourage more interest in this steady and successful market.

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