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Lending for house purchase in Scotland in the fourth quarter of 2013 at highest level since mid-2008

26 Feb 14

Lending for house purchase in Scotland in the fourth quarter of 2013 at highest level since mid-2008

In the fourth quarter of 2013, the number of loans for house purchase in Scotland reached its highest level since the second quarter of 2008, new CML data shows.

Lending for house purchase

As in the UK overall, lending to home-owners for house purchase in Scotland increased in the fourth quarter, with 15,400 loans in total being advanced, up by 3% compared to the third quarter of 2013 and up by 24% compared to the fourth quarter of 2012.

The value of these loans in this period also increased to £1.9bn, up 3% compared to the third quarter and an increase of 30% compared to the fourth quarter 2012.

Overall in Scotland in 2013, the total number of loans for house purchase was 54,100, up 15% compared to 2012. The value of these loans in total was £6.5bn, up 19% compared to 2012.

Chart 1: House purchase lending in Scotland: Year-on-year % change in Scotland compared with the UK26.02.2014 Scotland house purchase graph

Source: CML Regulated Mortgage Survey

First-time buyers

In the fourth quarter of 2013, 6,700 loans were advanced to first-time buyers in Scotland. This is the largest number in a single quarter since the fourth quarter of 2007. This was an increase of 3% compared to the third quarter of 2013 and up 26% on quarter four 2012.

A total of £680m was lent to first-time buyers in Scotland in the fourth quarter of 2013 which was up 3% compared to the second quarter and up 39% compared to the fourth quarter 2012.

First-time buyers in Scotland tended to borrow less relative to income compared to the UK overall, due to comparatively lower property prices. First-time buyers in Scotland typically borrowed 2.95 times their income, slightly down from 2.96 in the third quarter of 2013 but more than the 2.88 times borrowed in the last quarter of 2012. This is still considerably less than the 3.40 UK average in the last quarter of 2013.

First-time buyers spent 16.9% of their income on total mortgage payments in the fourth quarter, a slight decrease on the 17.1% in the third quarter of 2013 and down from 18.0% in the fourth quarter of 2012.

Chart 2: 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)

26.02.2014 Scotland first-time buyers graph

Source: CML Regulated Mortgage Survey

Home movers

In the fourth quarter of 2013, the number of loans to home movers in Scotland was 8,600, up 4% compared to the third quarter and up by 19% compared to quarter four 2012. The value of these loans was £1.2bn, an increase of 3% compared to the third quarter and up 26% compared to the fourth quarter of 2012.

Overall for 2013, home movers took out a total of 30,100 loans in Scotland, an increase of 9% compared to 2012. In value this totalled £4.1bn, which was up 12% compared to 2012.

Remortgage lending

Remortgage lending in Scotland declined in the fourth quarter of 2013, with 6,800 loans advanced, down 12% in volume on the third quarter and down 4% compared to the fourth quarter in 2012. By value, £740m was advanced to remortgagors in the fourth quarter of 2013, a decrease of 8% in value compared to the third quarter but up 4% on the fourth quarter of 2012.

Overall in 2013, the total number of loans advanced for remortgage in Scotland was 27,300, down 6% compared to 2012. The total value of these loans was £2.8bn which was down 1% compared to 2012. 

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

26.02.2014 Scotland remortgage graph

Source: CML Regulated Mortgage Survey

Iain Malloch, chair of CML Scotland, commented:

“The strong upward trend in lending seen in 2013 gives grounds for optimism, suggesting that improved mortgage availability and economic recovery are creating greater activity in the Scottish housing market. First-time buyers have been a crucial driver throughout 2013, and the CML anticipates this growth in the market will continue into 2014.”

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 first quarter of 2014 will be released on Wednesday 28 May 2014

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