“My how things have changed! - or have they?”

“My how things have changed!  - or have they?”

The headlines in the Press and Journal newspaper of Dec 7th, 1967 read –

“House prices go on rising. The outlook for the man who wants to buy his own home is very bleak. Scotland has suffered a big increase in house prices and Aberdeen in particular has been hard hit – it is now the most expensive city for the home buyer in Scotland”

Almost fifty years on we can look back and reflect upon what now seem like ridiculously cheap house prices. In a city where “modernised, 3 apartment and bathroom” flats were retailing from £2240 to £2750 and semi-detached or terraced stone built older houses were reaching the dizzy heights of £5500 to £7500 it must seem now incomprehensible, particularly to the older generation, that todays first-time buyers may expect in Aberdeen to pay between £100,000 and £150,000 for their first flat and that those in the market, possibly for their first family home, can now pay upwards of £250,000!

The article quotes from a manager of a national building society in Aberdeen who said “You are getting to a position now where there is an ever widening gap between income and house prices” How true are these words? Although wages in Aberdeen have risen over the decades as much as in any other Scottish city, the income/house price gap continues to stretch and mortgage payments in the 21st century, despite record low long term interest rates, are an increasingly heavy burden on home owners.

In the 1960’s the city’s Council stock would have represented approximately 50% of available housing. No longer with that option open to them, today’s home-buyers have the option of either buying or renting. With rental prices in Aberdeen ranging from £600 upwards for a one bedroom flat and often between £1500 and £3000 for a substantial family home, many find it still cheaper to pay a mortgage rather than rent. Quite a change from the 60’s where although increasing numbers were entering the property market, it was still significantly cheaper to rent than to buy.

In the 60’s Aberdeen was described entirely as a “sellers market” for various reasons –

• A changing social pattern with an affluent or would be affluent society where younger couples “reared in good municipal accommodation were reluctant to accept less when they moved.
• More people knew how to obtain mortgages and there was more money than ever before in building societies to lend.
• There was little decent rented accommodation available and
• A tremendous land famine existed where private developers and the Corporation competed bitterly over what little building land was available.

In today’s world, our Aberdeen property market has been pushed to the extremes by the development of North Sea Oil and the work and wealth it has brought to the area. Supply and demand over the “boom years” has meant that increasing ‘greenfield’ sites have been given over and opened up to swathes of new housing developments built to accommodate the new and incoming workforces to the area.

 Even post the 2007 financial crash, mortgages are still fairly readily available to the man in the street at competitive rates and over extended repayment periods of between 25-40 years.

The Councils housing stock has been decimated, and the primary rental option for the majority is the private rental sector  - the oil industry influence has meant that Aberdeen is now Scotland’s most expensive city in which to rent a property. Great news for the many “buy to let” investors around but bad news for those not involved in the oil-industry job market and seeking to take their first few shaky steps onto the property ladder.

Although there has been a huge growth in the city market over the decades, it will be interesting to reflect back on this time fifty years from now – will we still have a buoyant  oil-driven market where the vast majority are home owners or are in a position to pay ‘London level’ rentals or will we have experienced a property-market crash due to the demise of the industry and in which the man on the street, on a normal wage, once again becomes reliant on Local Authority or Housing association stock? Interesting and possibly changing times…?