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First-time buyer lending in Scotland at its highest level since 2008

28 Aug 13

First-time buyer lending in Scotland at its highest level since 2008

First-time buyers in Scotland took out 6,500 loans in the second quarter of 2013, up 33% over the same period last year and the largest total in a single quarter since mid-2008, figures released by the CML today show.

First-time buyers

A total of £630m was advanced to first-time buyers in Scotland in the second quarter of 2013 which was up 54% compared to the first quarter and up 40% compared to the second quarter last year.

With comparatively lower property prices than in the UK as a whole, first-time buyers in Scotland continued to borrow less relative to income than in the UK as a whole. First-time buyers in Scotland typically borrowed 2.91 times their income up from 2.81 in the first quarter of the year but considerably lower than the 3.3 times borrowed by first-time buyers on average in the UK.

The loan to value ratio increased slightly in Scotland for first-time buyers, a trend seen UK-wide, to 82% of the property value, in comparison to quarter one when it was 80%.

Chart 1: Lending to FTBs in Scotland, number of loans advanced, and lending to FTBs in Scotland as a proportion of the UK total (1 year moving average)

28.08.2013 Scotland FTBs graph v1

Source: CML Regulated Mortgage Survey

Home movers

Alongside first-time buyers, lending to home movers increased in the second quarter of 2013 in Scotland. There were 8,100 loans advanced to home movers this quarter which was an increase of 47% compared to the first quarter and up by 5% on the second quarter of 2012.

Total value of the loans also increased in Scotland accumulating to £1,100m from £1,020m in the second quarter of last year.

Lending for house purchases

Lending for house purchases in Scotland overall increased in the second quarter with 14,500 loans being advanced, up by 45% compared to the first quarter of 2013 and up by 16% compared to the second quarter last year.

The value of these loans also increased. as Lending for house purchases was worth £1,740m in the second quarter, up in value by 55% on the first quarter of 2013 and by 16% over the same period last year.

Chart 2: House purchase lending in Scotland: Year-on-year % change in Scotland and the UK

28.08.2013 Scotland house purchase graph v1

Source: CML Regulated Mortgage Survey

Remortgages

Following a similar pattern to trends in the UK overall, Scotland saw remortgage lending to borrowers pick up in the second quarter of 2013 after a subdued period. In total, £770m was advanced to borrowers remortgaging in Scotland which was up by 35% compared to the first quarter of the year and a slight increase on the £750m advanced in the second quarter of 2012. 

Chart 3: Remortgage Lending in Scotland: Year-on-year % change in Scotland and the UK

28.08.2013 Scotland remortgage v1

Source: CML Regulated Mortgage Survey

Iain Malloch, chair of CML Scotland, commented:

“The positive growth in lending to both first-time buyers and home movers has led to a welcome increase in lending for house purchases in Scotland.

"With comparatively lower prices in Scotland than in the UK as a whole, first time buyers are able to borrow less relative to income. There is clearly value in the Scottish market which provides a great opportunity to get on the housing ladder."

Notes to editors

1. The Council of Mortgage Lenders' members are banks, building societies and other lenders who together undertake around 95% of all residential mortgage lending in the UK. There are 11.3 million mortgages in the UK, with loans worth over £1.2 trillion.

2. Source: CML Regulated Mortgage Survey

3. The Council of Mortgage Lenders does not publish statistics for mortgage approvals. The data in our monthly Regulated Mortgage Survey and gross lending press releases relate to mortgage advances only. A mortgage approval is the firm offer to a customer of a specific amount of credit secured against a particular property. A mortgage advance is the total amount of loan actually provided to the buyer, by the lender. Please see the mortgage statistics timeline on our website for further information.

4. Data for the third quarter of 2013 will be released on Tuesday 26 November 2013

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