Scottish Sales Down 20%, Prices Up by 4.6%

cheap_charlie

http://news.bbc.co.uk/1/hi/scotland/7584596.stm

IveSeenTheLight

cheap_charlie wrote: »

http://news.bbc.co.uk/1/hi/scotland/7584596.stm

And the "boom" was all over in February
http://news.bbc.co.uk/2/hi/uk_news/scotland/7245255.stm

There's no doubt that there is more caution in the Scottish market hence lower sales, but the affordability (house price - earnings ratio) still remains the best in the UK

Scotland House price - Earnings Ratio = 4.38
UK Average House price - Earnings Ratio = 5.31
South east House price - Earnings Ratio = 6.50

At the peak, Scotland was almost 3 full ratio points less than the South East (4.66 as opposed 7.59 in Q3 07. difference 2.93). Now it is only 2.12.
So certainly the gap is closing but shows that affordability haschanged more in the South East than in Scotland

Data from
http://www.hbosplc.com/economy/includes/25_07_08Affordability.xls

Its this fact that helps Scotland to be affected less than other areas

IveSeenTheLight

Its also very interesting that in 88 Q4 (roughly the last cycle peak) South East also had a peak ratio of 7.54 (7.59 this time)

During the last 25 years, Scotlands affordability has changed roughly 2 ratio points, while the South East changed by 4 points.

This shows that while both areas fluctuate, Scotland is more stable regarding affordability than others in the UK

Scotland average in last 25 years = 3.52
Scotland peak in last 25 years = 4.83
Scotland trough in last 25 years = 2.72

South East average in last 25 years = 5.37
South East peak in last 25 years = 7.59
South East trough in last 25 years = 3.73