City living in Scotland is becoming more expensive according to the Bank of Scotland Affordable Cities Review, which has revealed a drop in home affordability for city dwellers.

The average price for a city home in Scotland (£175,962) now apparently stands at 5.24 times gross annual average earnings. This is a 7% increase on last year, when the average house price in Scotland was £161,463 (4.89 PE ratio), but is still significantly below the peak of 6.12 in 2008. However, city living in Scotland (5.24) continues to be more affordable than the UK city average (6.12), says the Bank of Scotland.

Stirling remains the UK’s most affordable city for a second year, despite a deterioration in affordability over the past year. The average property price in the Scottish city of £158,645 is 3.85 times gross average annual earnings. In contrast, Edinburgh is Scotland’s least affordable city, with the average house price sitting at £216,424, which is 6.11 times the gross annual average earnings.

Four of the ten most affordable UK cities are in Northern Ireland due primarily to the relatively low house prices in the country: Londonderry (3.92), Belfast (4.49), Newry (4.51) and Lisburn (4.63). Lancaster (4.03) and Bradford (4.17) are the most affordable cities in England.

Aberdeen has recorded the biggest price rise of any UK city over the past decade, with a gain of 88% as a result of rising housing demand due to the strong performance of the oil and gas sector over most of the period. Even over a period of five years, Aberdeen has seen a 26% increase in house prices, compared to just 3% in Stirling.

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