Mortgage payments as a proportion of income have fallen by more than two-fifths in Scotland in recent years, from a peak of 38% in Q4 2007 to 22% in Q4 2012, according to new Bank of Scotland research.

Lower house prices and reduced mortgage rates have been the main drivers behind the significant improvement in affordability. The average monthly take-home wage in Scotland is £1,954 while the average monthly mortgage payment is £424.

Mortgage payments for a new borrower have remained at their lowest level in relation to earnings for almost a decade

Typical mortgage payments for a new borrower – both first-time buyers and homemovers – at the long-term average loan to value ratio have been broadly stable at 21-22% of disposable earnings over the past two years. This is the lowest level since 2002-03 and is comfortably below the average of 30% recorded since 1983.

Mortgage payments account for the lowest proportion of disposable earnings in Northern Ireland (20%) followed by Scotland (22%). This compares with the UK average of 28%.

Seven of the ten most affordable local authority districts in the UK are in Scotland. West Dunbartonshire is the most affordable local authority district in Scotland and the second most affordable in the UK with typical mortgage payments accounting for 17.6% of average local earnings. West Dunbartonshire is followed by Renfrewshire, North Ayrshire (both 17.9%) and South Ayrshire (18.0%).

Average mortgage payments on a new loan amount to 27.8% of average local earnings in Aberdeenshire. Perth & Kinross (27.3%), Edinburgh (27.0%) and East Renfrewshire (26.7%) are the next least affordable areas in Scotland.

Nitesh Patel, housing economist at Bank of Scotland, said: “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.

“The favourable mortgage affordability position is a boost for both those who already have a mortgage and those who are able to raise the required deposit to buy a home. Higher deposit requirements and low, or negative levels, of housing equity for many homeowners, however, mean that significant numbers of would-be home buyers and movers remain unable to enter the market.”