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  4. Lending in Scotland grows - but CML continues to work across tenures

Lending in Scotland grows - but CML continues to work across tenures


Published: 4 March 2014 | Author: Bernard Clarke

The number of first-time buyers in Scotland is at its highest level for six years, according to data we published at the end of last month. The figures also showed strong growth in lending to movers, but remortgaging in Scotland remains subdued.

The newly-published figures generally give grounds for optimism and point towards greater activity in the Scottish housing market, a trend that we expect to continue this year. But guests at the CML Scotland annual lunch on Friday will also hear about our work in support of housing in all tenures across the country.

We are currently contributing, for example, to the private rented sector tenancy review group, set up by the Scottish government to look at how the system can be improved for those who rent their home. The group is currently considering issues relating to the length of tenure, notice and rent review periods.

We are also participating in the Scottish government’s interim review of the home report. Our submission to the review, submitted last week, highlighted the concerns of lenders about the reliability of the valuation contained in the report, particularly in cases where a property is put on the market but not sold for several months.

However, our data does point to increased activity in the Scottish housing market, with the number of loans for house purchase in the final quarter of last year reaching its highest level since 2008. Lenders advanced 15,400 mortgages for house purchase, up 3% on the preceding three months and 24% higher than in the fourth quarter of 2012.

In the year as a whole, lenders advanced more than 54,000 loans for house purchase, 15% more than in 2012. The value of these loans totalled £6.5 billion, up 19% year-on-year.

The number of loans to first-time buyers in Scotland in the fourth quarter of 2013 totalled 6,700, the highest number since 2007. Lending to first-time buyers was up 3% on the preceding three months and 26% higher than in the fourth quarter of 2012.

First-time buyers in Scotland borrowed an average of 2.95 times their income – somewhat less than the UK average – partly because of lower property prices.

The number of loans to movers in the final three months of last year totalled 8,600, 4% higher than in the preceding quarter and up 19% year-on-year.

Remortgaging in Scotland, however, remains flat. There were 27,300 loans for remortgaging last year, down 6% on 2012.

Responding to the buoyant lending figures, the chair of CML Scotland, Iain Malloch, said:

"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 in 2014."