Q4 2012 brought mortgage payments to a much lower 22% proportion. That means the average monthly payment is of £424,m while the average wage in Scotland was of a little under £2000. Mortgage payments for new borrowers are still at their lowest level as percentage of earnings and have been so for close to a decade. New borrowers, category that includes both first time buyers and home movers, have seen a 21-22% ratio (long term average loan to value ratio) of disposable earning for the past two years, the lowest level since 2002 to 2003.

Across the UK, Scotland ranks second when comparing proportion of disposable earning, mortgage payments recording a lower ratio in Northern Ireland (20%), while the UK average is of 28%. Also, seven of the 10 most affordable local authority districts in the UK are in Scotland.

‘Mortgage payments in Scotland account for a lower proportion of disposable earnings than anywhere else in the UK, bar Northern Ireland. In addition, seven of the ten most affordable local authority districts are in Scotland with West Dunbartonshire the most affordable. Mortgage affordability has improved significantly over the past few years as a result of falls in house prices and cuts in mortgage rates. This development has been a key factor supporting housing demand and is expected to remain so in 2013 as interest rates remain low,’ said Nitesh Patel, housing economist at Bank of Scotland.

The improvement in mortgage affordability would favor both those who are already making mortgage payments and those who want to obtain a new loan and can afford the required deposit. Yet Patel still expects the number of home buyers and movers to remain low as the affordability is countered by higher deposit requirements and low housing equity.

The Scottish Property Federation reports scarecely more than £1.9 billion in transactions having occurred during all of 2011, that number down some 25.5 per cent on a 9.5 per cent drop in transactions overall compared to 2010. On a whole financial news from Scotland has been dismal of late. The Guardian reported on the North of England having been hit hardest overall in this recession, telling of rising unemployment and discontent with budget cuts. All Scotland is cast now into a scenario not unlike Greece, Ireland, Spain, and other EU countries.

Lending on real estate has been tumbling for more than two years now according to numbers from the Bank of England. And on the residential side of the real estate market in Scotland, things are not looking any brighter. Falling prices by the end of 2011 signal harder times for an overall real estate market stricken like all else in the North by the biggest economic downturn since the Great Depression, maybe ever.

To  make matters worse politically and banking wise, the Daily Record reports state owner Royal Bank of Scotland raking in over £530million pre-tax profits for 2011. With all of Scotland still reeling to dig out of a money disaster, RBS is being raked over the coals for sacking 21,000 employees then forking over huge bonuses to their top decision makers. RBS is not stranger to upheaval and ill fated decisions, the bank reported the largest ever single loss for any UK bank of £24billion after the takeover of Dutch bank ABN Amro.

Taken on the whole, the news of Scotland’s continued woes has to weigh heavily on the UK and the world in general. RBS boss Stephen Hester’s huge bonuses, Swiss ski chalets, public outcry, RBS and the entire Scotland banking sector would seem suspect for many. In 2010 Hester alone took home in excess of £6.5m in bonuses and pension payments. The UK Government owns upwards of 80% of RBS.

We will update this news as the story develops. We leave you with Hester reporting on 2011 results for RBS.