Why affordability is key for the first-time buyers market

The people on the first rung of the housing ladder provide underlying support for the whole sector, writes ​David J Alexander.

The underlying strength of the property market derives from strong first-time buyer (FTB) demand. If there is no upward pressure at the starter end of the market, then there will be no growth further up the price chain. A healthy and lively first-time buyer market generates activity and growth at each stage above it.

In Scotland the FTB part of the housing market continues to perform strongly although, as with any country-wide evaluation, there are clearly some areas doing better than others. For Scotland, as a whole, average FTB prices rose by £9,868 (6.6 per cent) in the 12 months from December 2024 to November 2025, which was substantially higher than the £6,925 in the 12 months prior to November 2024 but broadly in line with the percentage increase of 6.2 per cent experienced by the total housing market.

In Edinburgh, average FTB prices were up £15,497 on the year, which is an increase of just under £300 per week, whereas Aberdeen saw prices fall by £,6,422 over the same period.

As expected, the most expensive parts of the country for buying all properties are also the areas which have the strongest FTB performance. East Dunbartonshire is up £12,653 to reach £204,322; Midlothian has risen £11,554 and is at £235,393; while Glasgow has increased by £10,273 to achieve £173,214. Inverclyde remains the cheapest place for FTBs, with average prices down £29 at £94,644.

While these figures show that demand remains high as prices will only rise like this when there are more buyers than sellers it is clear that affordability could begin to play its part. Whilst it is true that affordability has been helped by the recent above-inflation public sector pay settlements there will come a point when 6.6 per cent annual average house price increases push many out of the market.

Over the last year lenders have increasingly begun to recognise the importance of FTBs and are now offering higher income multiples of between 5.5-6 times salary, which is the highest figure for decades. At the same time, stress lending criteria has also been relaxed as lenders seek to be able to offer higher mortgages to buyers keen to get on the housing ladder.

While this is understandable it is also not without risk. We have been here before and the resultant price collapse in 2008 impacted first-time buyers the most as they had limited equity and had stretched their finances to the limit buying increasingly more expensive homes.

That is not to say that flexible lending isn’t required at the moment, but that appropriate monitoring must be observed. The housing market cannot rise continuously at this level without becoming strained. So, while average price rises of a few per cent are generally regarded positively it is important that runaway property inflation does not take control of the market.

Growth in the property market is good but maintaining affordability is key. Ensuring that housing supply keeps pace with demand has never been more crucial and first-time buyers are essential in providing the underlying support for the whole market. These latest figures are robust but need to be monitored to ensure they don’t go out of control and cause the sector to falter.