Mortgages in the Borders fifth least affordable in Scotland

LOW wages in the Borders make it one of the least affordable places in Scotland when it comes to how much of their wages residents need to spend on paying the mortgage.

By The Newsroom
Wednesday, 29th August 2012, 10:12 am

Recent figures produced by the Bank of Scotland reveal that the Scottish Borders is the fifth least affordable local authority area in Scotland for home owners.

Mortgage payments for a new borrower in Scotland are at their lowest as a proportion of disposable earnings for ten years but this depends on where they live and while East Ayrshire is the most affordable place to live - 15 per cent of average local earnings - in the Scottish Borders residents are having to pay up to 23.9 per cent of their wages to pay the mortgage.

Overall, mortgage payments have nearly halved as a proportion of income over the past five years from a peak of 38% in 2007; averaging 20 per cent of disposable earnings in Scotland compared with 26 per cent across the UK.

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Nitesh Patel, at Bank of Scotland, commented: “Mortgage payments in Scotland account for a lower proportion of disposable earnings than anywhere else in the UK. In addition, all ten of the most affordable local authority districts are in Scotland, with East Ayrshire the most affordable.”

This may be true in many areas of Scotland, but the Borders sits with Aberdeenshire, Perth & Kinross, Edinburgh, and the Highlands in the top five of least affordable local authority areas.

Ettrick, Roxburgh and Berwickshire MSP John Lamont said: “To be lower than the UK average is positive and shows that the days of mortgage repayments taking up large proportions of a household’s disposable income seem to have gone. However, new borrowers in the Borders are still paying more of their disposable income than the majority of Scotland and there is clearly room for improvement.

“Mortgages for houses in the Borders are the fifth least affordable in Scotland and we need to do more to help and encourage first time buyers to invest in our housing market. We need to ensure that mortgage repayments become less of a burden, and to achieve this banks will have to take steps towards offering lower repayment schemes.”

“The housing industry in the Borders is vital for our local economy, but we are discouraging new borrowers by being unaffordable compared to other areas. The banking industry has the power to help this situation by offering better mortgage rates for our region and I hope they can take action to see this happen.”