Paul Denton, chief executive of Scottish Building Society warns the impact of COVID-19 could prove a barrier to a generation of buyers getting on to the housing ladder.
Paul Denton (pictured), chief executive of Scottish Building Society welcomes rising house prices, however warns the impact of COVID-19 could prove a barrier to a generation of buyers getting onto the housing ladder.
The ONS House Price Index shows that property prices across the UK rose by 7.6% in the year to November 2020, and were up 8.6% in Scotland.
In Scotland, terraced properties showed the largest increase, rising by 10.0% to £139,874.
The largest increase was in East Ayrshire at 15.6% to £110,073.
The only decrease was recorded in Aberdeen City, where the average price fell by 3.4% to £140,629.
Furthermore, average house prices rose 152% in the 20 years to 2016, while family income for 25 to 34 year olds only grew by 22%.
Denton said: “The increase is driven by pent-up demand caused by lockdown earlier last year.
"It does also highlight systemic changes in the market, which could have consequences on the ability of a generation of young people to buy their own homes.
“Remote working, lockdown and the end to the daily commute has seen people re-evaluate their priorities on the type and size of house they and their family need.
"People are looking for larger homes outside the city, with gardens and home offices.
“However, before COVID-19, Scotland was suffering a significant lack of housing stock – with 80,000 fewer homes built each year since the last financial crash.
“Now the unpredictable consequences of COVID-19 could exacerbate that shortage and increase the generational inequality gap.
“House prices have soared disproportionally relative to income, and many young people struggle to save up for deposits which can be close to their annual salary.
"They end up relying on the bank of mum or dad or stay at home longer.
“There is no magic bullet to solving this problem, but it does need to be recognised as an urgent priority for our industry and governments.
“The housing market is worth £18bn and key to the recovery from a pandemic that has left permanent economic and societal scars.
“Part of that recovery has to be a real strategic collaboration to ensure that we do not leave a generation of young people behind.”