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.

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  4. Scotland house purchase lending up 7% in the first quarter of 2016

Scotland house purchase lending up 7% in the first quarter of 2016

Published: 25 May 2016

On an unadjusted basis, lending in the first quarter:

  • Home-owners borrowed £1.8bn for house purchase, down 22% quarter-on-quarter but up 1% year-on-year. They took out 13,500 loans, down 22% on the previous quarter but up 7% compared to the first quarter 2015.
  • First-time buyers borrowed £660m, down 24% on the fourth quarter 2015 but up 10% on the first quarter last year. This totalled 6,200 loans, down 23% quarter-on-quarter but up 11% year-on-year. 
  • Home movers borrowed £1.1bn, down 21% quarter-on-quarter and down 4% compared to a year ago. This totalled 7,300 loans,  down 22% quarter-on-quarter but up 4% on quarter one 2015.
  • Remortgage activity totalled £780m, down 1% on the fourth quarter 2015 but up 13% compared to a year ago. This came to 6,400 loans, down 5% quarter-on-quarter but 5% up compared to a year ago.

Carol Anderson, CML Scotland chair, commented:

Seasonal factors often affect lending levels in the first quarter of the year, but there are encouraging indicators in Scotland, as all lending types showed growth year-on-year. 2016 saw the strongest first quarter in a year for house purchase lending since 2008 and, with affordability conditions continuing to be favourable, we would expect gradual year-on-year growth in Scotland to continue throughout 2016.

Scotland was the focus of a recent CML News & Views article that took a more in-depth look at how lenders will work with the new Scottish government on issues surrounding housing in all tenures. It can be read here.

Scotland house purchase and remortgage lending in quarter one

This period had the highest total borrowed for house purchase in the first quarter of a year since 2010 in Scotland, and highest total borrowed for remortgage in the first period of a year since 2011. This was mainly driven by home movers who took out the highest amount of loans for house purchase in a first quarter of the year since the first quarter of 2008.

Affordability metrics for first-time buyers in Scotland remains better than for the UK overall. The amount borrowed this quarter compared to the previous was £97,795 (£130,500 in the UK overall) from £100,000 and the average household income of a first-time buyers was £33,381 (£40,000 in the UK overall) from £34,066 meaning income multiple in Scotland was 2.97 down compared to 3.01 the previous quarter and the UK average of 3.46.

Affordability metrics for home movers in Scotland also remains better than for the UK overall. The amount borrowed this quarter was £136,000 (£172,295 in the UK overall) from £135,789 the previous quarter and the average household income of a home mover was £51,149 (£56,104 in the UK overall) from £50,815 meaning income multiple in Scotland was 2.68 down compared to 2.73 the previous quarter and the UK average of 3.20.

Chart 1: Number of loans to home-owners, 2007-2016

 20160525 Scotland Q1 2016 MLT press release chart one

Source: CML Regulated Mortgage Survey      

Download data

Table 1: Number of loans for house purchase and remortgage

 

House purchase

Remortgage

 

FTBs

Movers

Home owners

Q1 2015

5,600

7,000

6,100

Q4 2015

8,000

9,300

6,700

Q1 2016

6,200

7,300

6,400

Change on Q4 2015

-22.5%

-21.5%

-4.5%

Change on Q1 2015

+10.7%

+4.3%

+4.9%

Table 2: Value of loans for house purchase and remortgage

 

House purchase (£m)

Remortgage (£m)

  FTBs Movers Home owners

Q1 2015

600 1,150 690

Q4 2015

870 1,390 790

Q1 2016

660 1,100 780

Change on Q4 2015

-24.1% -20.9% -1.3%

Change on Q1 2015

+10.0% -4.3% +13.0%

 20160525 Scotland Q1 2016 MLT FTBs affordability infographic

20160525 Scotland Q1 2016 MLT home movers affordability infographic

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 11.1 million mortgages in the UK, with loans worth over £1.3 trillion.

2. Source: CML Regulated Mortgage Survey for all home-owner mortgage data.

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. The second quarter data will be released on Wednesday 24 August 2016.

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Gareth Hill

020 7438 8922

Sue Anderson

020 7438 8924

Bernard Clarke

020 7438 8923