This has resulted in average affordability in Scotland’s cities worsening in the last 12 months from 5.25 to 5.36 times gross average annual earnings, the third successive annual decline in affordability.

The data from the Bank of Scotland Affordable Cities Review also shows that on average, affordability in Scottish cities is now at its lowest level since 2009 but is still 12% lower than the peak of 6.12 times earnings in 2008 at the height of the last housing market boom.

The overall improvement in affordability across Scottish cities as a whole over the past eight years has been driven by a combination of an increase of 10% in the gross average annual earnings and an average house price decline 3%.

Edinburgh is Scotland’s least affordable city where the average house price is 6.12 times the gross average earnings in the city. With an average price of £220,099, houses in Edinburgh are more expensive compared with average earnings than in any other Scottish city.

Inverness at 6.03, Aberdeen at 5.72, Dundee at 5.38 and Perth at 5.24 make up the top five least affordable cities in Scotland while Stirling is the most affordable city and the second most affordable in the UK with an average property price of £165,658 which is 4.11 times the gross average annual earnings.

Glasgow is the second most affordable city in Scotland and 10th in the UK, with an average house price of £159,580, which is 5.07 times the gross average annual earnings in the city.

House price growth has been highest in Aberdeen over the past decade and since 2011 Aberdeen has recorded the biggest price rise of any Scottish city over the past decade and with a gain of 58%, is the only Scottish city to appear in the top 10 UK cities with highest house price growth in fifth place.

The report explains that this is as a result of rising housing demand due to the strong performance of the oil and gas sector over most of the period. More recently, Aberdeen has seen a 22% rise since 2011 but prices are not declining due to a decline in the resources sector.

‘The rising house prices over the past three years have resulted in a deterioration in home affordability in Scotland’s cities. Although affordability is at the lowest level since 2009, it is still much lower than the height of the last housing market boom in 2008,’ said Nicola Noble, mortgages director at Bank of Scotland.

‘Aberdeen has recorded Scotland’s highest house price growth over the past decade and more recently during the economic recovery, due to strong performance in the oil and gas sector,’ she added.

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