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Lending data show good market conditions across the UK


Published: 2 December 2014 | Author: Bernard Clarke

Our recently published data on lending activity in different nations and regions showed that markets are continuing to recover across the UK.

Figures for Scotland showed that in the second and third quarter of this year lending for house purchase was at its highest level since 2008, suggesting that the market has remained robust despite the introduction of new mortgage rules in April. A surge in first-time buyer activity has been one of the features of Scotland’s economic recovery.

Next April, the Scottish government will introduce a new land and buildings transaction tax, and this may affect activity both in the build-up to – and aftermath of – the change. The new tax will replace stamp duty in Scotland, and will be the first time we have seen different tax rates levied on residential property in different parts of the UK.

Meanwhile, lending for house purchase in Wales in the third quarter was the highest since 2007, suggesting that conditions were continuing to improve for borrowers wanting to get on the housing ladder.

There was a slight decline in remortgaging in Wales, but that was consistent with the rest of the UK. Housing affordability is better in Wales than in the UK overall and, with expectations of higher interest rates receding, conditions for borrowers should remain encouraging as we go into next year.

Year-on-year growth in lending for house purchase was stronger in Northern Ireland than in the rest of the UK. First-time buyers have been driving the market, but increased borrowing by movers suggests that it is becoming easier for all to transact. As the economy recovers, affordability remains good with both house prices and the amount people borrow relative to their incomes lower than the UK average.

The market in London has been more buoyant than the rest of the UK, and lending in the capital is at its highest level for seven years. Despite concerns over the strong growth in house prices, lending activity is being driven by both first-time buyers and movers, suggesting that borrowers can still find homes that they can afford.