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Highland house prices up 33% as mortgages cost hundreds more

Average house prices in the region are some 10% higher than the Scottish average and have risen faster than almost all other local authorities.

Mortages
Mortgage rates have risen across the UK - costing the average Scots hundreds more a month. Image: Shutterstock

Scots are paying hundreds more for their mortgage every month – while the cost of an average detached house in the Highlands has spiked by 33%.

House of Commons analysis commissioned by the SNP found the average Scot is paying £381 more per month than they were 20 months ago.

In November 2021 the average two-year fixed rate mortgage was 2.29%, which would see a typical Scottish household with a mortgage of £166,431 pay around £729 a month on a 25 year term.

But as of June 2023 the average two-year fixed rate is 6.37%, meaning the same household would now be paying £1,110 a month – a difference of over £4,500 every year.

Scots homeowners told to expect further mortgage rises

The SNP says it means a full-time employee in Scotland on the National Living Wage would have to forego their entire wage for more than a quarter of a year just to pay the additional mortgage interest.

The party also warned that homeowners should brace for further increases amid forecasts that UK interest rates could be as high as 6.5% by the end of 2023.

They say that if the rate of a two-year fixed mortgage was to rise accordingly to 7.87%, the average home could be paying as much as £541 more a month.

SNP housing spokesman Chris Stephens MP said the Conservatives have “trashed the economy”.

SNP MP Chris Stephens

He added: “Housing is a fundamental need that no one should have to go without but Westminster is making it impossible for many first time buyers to afford their own home – and it’s putting mortgage holders and renters at risk of losing their homes through no fault of their own.”

Separate data from the Office for National Statistics shows that as well as having some of the highest average monthly mortgage payments in Scotland, house prices in the Highlands have also continued to climb.

How it compares in Moray, Aberdeenshire and Aberdeen

Typical payments on a five-year fixed mortgage for a detached property in the Highlands is around is £1,661 with a deposit of £30,000 and a 25 year mortgage.

This compares to £1,353 in Moray and £1,479 in Aberdeenshire. In Aberdeen, typical mortgage payments exceed £1,700.

Buyers searching for a detached home can expect to pay at least £311,000, up 33% on prices in November 2018.

The price of an average semi-detached home has risen by the same amount, while the cost of a terraced home has increased by 30%.

First-time buyers also face a steep increase in what they can expect to pay, with those buying in the Highlands paying around £165,859 in April 2023 – compared with an average of £149,580 across Scotland.

But those buying their first home in Aberdeen can expect to pay less than elsewhere in Scotland. This group spent an average of £111,205 in April 2023.

The UK Government said buyers and renters were facing a “very difficult time”.

UK Chancellor Jeremy Hunt agreed a deal with banks to help struggling homeowners. Image: Shutterstock

They previously struck a deal with big mortgage lenders to provide more flexibility to those struggling with climbing repayments.

It means banks will allow customers who are up to date with repayments to switch to interest-only payments for six months or extend their mortgage term to reduce their monthly payments

Prime Minister Rishi Sunak’s official spokesman said: “The single biggest thing government can do is work together with the Bank of England in lockstep to reduce inflation, which is driving some of these high mortgage rates we are seeing.”