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Scottish lending data show higher remortgaging


Published: 15 June 2011 | Author: Bernard Clarke

The housing market in Scotland in the first quarter of 2011 displayed similar trends to the UK as whole, with house purchase lending in decline but an increase in remortgaging, with borrowers at that stage anticipating a rise in interest rates.

Our data showed that around 8,000 loans for house purchase, worth £888 million, were taken out in Scotland in the first three months of 2011, a fall of 27% by number and 29% by value on the preceding quarter. Both totals were also 19% lower than in the same quarter in 2010.

Four in 10 house purchase loans advanced in Scotland in the first three months of the year were to first-time buyers, an increase from 35% in the preceding quarter. The proportion of first-time buyers in Scotland is slightly higher than in the UK as a whole, where it increased from 36% to 37% in the first quarter.

However, the number of loans for house purchase in Scotland – both to first-time buyers and movers – fell in the first three months of the year. 

There were 3,200 loans, worth £270 million, taken out by first-time buyers, down 18% by volume and 21 % by value. Lending to movers declined by 31% by volume and 33% by value in the first quarter, with 4,900 loans, worth £618 million.

Lending criteria for both groups were similar to the last three months of 2010. First-time buyers borrowed on average 77% of the property’s value, up from 76% but below the UK average of 79%. They typically borrowed 2.85 times their income, compared with 3.15 times income across the UK.

Movers borrowed 70% of their property’s value, the same as in the last quarter of 2010, and more than the UK average of 68%.

As in the rest of the UK, remortgaging picked up in Scotland in the first three months of the year.  A total of 8,800 remortgaging loans were advanced, worth £900 million, an increase of 16% by volume and 13% by value over the preceding quarter.