From 1st July the Council of Mortgage Lenders is integrated into a new trade association, UK Finance. For the time being, all UKF mortgage information will continue to be published on this website, and UKF member-only mortgage information will only be available here.

UK Finance represents around 300 firms in the UK providing credit, banking, markets and payment-related services. The new organisation takes on most of the activities previously carried out by the Asset Based Finance Association, the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association. Please go to for wider content and updates from UK Finance.

  1. Home
  2. News
  3. Press releases
  4. First-time buyers in Scotland reach highest yearly total since 2008

First-time buyers in Scotland reach highest yearly total since 2008

Published: 26 February 2013

The number of first-time buyers in Scotland rose to the largest annual total in four years, according to new data released today by the Council of Mortgage Lenders in Scotland.

A total of 19,000 first-time buyers became homeowners in 2012 - a 13% increase compared to 2011.

On a quarterly basis, lending to first-time buyers and those looking to remortgage also increased, while lending to home movers eased.

First-time buyers

In the fourth quarter of 2012, 5,200 first-time buyers bought their first home in Scotland, a 4% increase compared to the third quarter and up by 18% on the same period in 2011. It was also the largest quarterly total for loans to first-time buyers since the last quarter of 2009.

By value, loans to first-time buyers totalled £490 million in the fourth quarter, up from £460 million in the previous quarter and £400 million in the fourth quarter of 2011.

Indicators of affordability for first-time buyers in the Scottish market were also encouraging. Lower house prices, on average, meant that more first-time buyers were exempt from paying stamp duty than in the UK. In the fourth quarter 62% of first-time buyers bought a property for less than £125,000 compared to 39% in the UK.

First-time buyers also borrowed less relative to their income than in the UK, and spent a smaller proportion of their income on mortgage payments. First-time buyers in Scotland typically borrowed 2.88 times their income, considerably lower than the 3.26 times borrowed by their counterparts in the UK, and spent 18% of borrowers' income, compared to 20% in the UK.

While it may appear as if the recovery in first-time buyer volumes in Scotland has lagged behind the UK - where first-time buyer lending is at its highest since 2007 - in reality this is due to the initial resilience in the Scottish market at the onset of the financial crisis. Lending did not fall as quickly as the rest of the country in 2008 and so it had to increase further to get above 2008 levels.

Chart 1: Number of loans advanced to first-time buyers in Scotland

Number of loans advanced to first-time buyers in Scotland

Source: CML regulated mortgage survey 

Home movers

While there was an increase in lending to first-time buyers in Scotland, there was a fall in lending to home movers in the fourth quarter for the second consecutive quarter. A total of 7,100 loans were advanced to home movers, compared to 7,300 in the third quarter and 7,200 in the same period in 2011. This represented a 3% fall on the previous quarter and a 1% fall compared to the fourth quarter of 2011.

Despite the slight easing in the second half of the year, there was a small increase in lending to home movers for 2012 overall. A total of 27,600 loans were advanced to home movers (worth £3.66 billion) up marginally from 27, 500 loans (worth £3.6 billion) in 2011.

House purchase lending

As a result of the increase in first-time buyer activity but slight fall in loans to home movers, overall house purchase lending rose slightly in the fourth quarter.

House purchase lending increased by 1% in the fourth quarter of 2012 (12,300 loans) compared to the third quarter (12,200 loans) and by 5% on the last quarter of 2011 (11,700 loans).

As in the UK, house purchase lending in 2012 increased year-on-year. Overall, 46,600 loans (worth £5.4 billion) were advanced in Scotland, an increase of 5% compared to 2011.

Chart 2: House purchase lending in Scotland, number of loans advanced, and house purchase lending in Scotland as a proportion of the UK total (1 year moving average)

House Purchase lending in Scotland, number of loans advances

Source: CML regulated mortgage survey

Remortgage lending

Following a similar pattern to the UK overall, remortgage lending increased in the fourth quarter when £700 million was advanced - a 6% increase compared to the third quarter but still 20% lower than the fourth quarter in 2011.

Overall, a year-on-year fall in each quarter resulted in a 19% fall in remortgage lending in 2012 compared to 2011.

Iain Malloch, chair of CML Scotland, commented:

"The Scottish housing market showed positive signs of recovery in 2012, broadly following the pattern seen in the rest of the UK.

"The availability of mortgages at more than 90% loan-to-value has more than doubled in the last two years and lenders expect to offer more high loan-to-value mortgages this year. This, and the fact that the number of first-time buyers is at a post-crunch high, suggests that lenders really are open for business."

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.

4. Data for the first quarter of 2013 will be released on Tuesday 28 May 2013.

Contact us

Julian Wadley

0207 4388922

Sue Anderson

0207 4388924

Bernard Clarke

0207 4388923