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House purchase lending up 39% in Scotland in the second quarter

Published: 26 August 2015

New CML data on the characteristics of lending in Scotland in the second quarter of 2015 outlining mortgage lending to first-time buyers, home movers and remortagors.

Lending in the second quarter 2015:

  • Home-owner house purchase activity came out of the traditional seasonal dip in the first quarter to see large growth in numbers both quarter-on-quarter and, to a lesser extent, year-on-year.
  • First-time buyers increased by numbers and amount borrowed both in comparison to the first quarter and the second quarter in 2014.
  • Home mover activity in Scotland saw a substantial quarter-on-quarter increase, but remained unchanged from the second quarter of 2014. 
  • Remortgage lending rebounded out of a stagnant period to total the highest volumes since the last quarter of 2013.

Kennedy Foster, CML policy consultant, Scotland, commented:

After three quarters of consecutive decline, it is welcome to see house purchase levels in Scotland bounce back finally. This quarter saw the highest number of loans to those purchasing a home since the second quarter of 2008. With competitive mortgage deals, better affordability than the UK overall and and the replacement of stamp duty with a new taxation system that benefits the majority of borrowers, it appears conditions are relatively favourable at the moment in Scotland for those looking to buy a home.

Chart 1: Loans for home-owner house purchase and for remortgage by value

 Scotland lending trends press release Q2 2015 - Chart 1

Source: CML Regulated Mortgage Survey (April 2005 onwards), CML Economics

Download the data         

Chart 2: Number of loans for house purchase and proportion of FTBs and home-movers

 Scotland lending trends press release Q2 2015 - Chart 2

Source: CML Regulated Mortgage Survey (April 2005 onwards)

Download the data

Table 1: Second quarter lending for home-owner house purchase and remortgage

  Number of house purchase loans Value of house purchase loans, £m Number of remortgage loans Value of remortgage loans, £m
Second quarter 2015 16,700 2,130 6,600 760
Change compared to first quarter 2015 39.2% 27.5% 11.9% 15.2%
Change compared to second quarter 2014 3.1% 4.4% 15.8% 20.6%

Source: CML Regulated Mortgage Survey (April 2005 onwards)


Lending for house purchase and remortgage  

House purchase lending in Scotland saw a large quarter-on-quarter rise, in the both number of loans and amount borrowed, compared to the first quarter of 2015. While the rise year-on-year compared to the second quarter of 2014 was less substantial, the amount borrowed and the amount advanced were the highest since the second quarter of 2008. 

The breakdown in house purchase lending remains relatively evenly split, with first-time buyers accounting for 48% and home movers 52% of all house purchase activity.  

Remortgage lending also saw a rise year-on-year and quarter-on-quarter in the amount borrowed and in the number of loans, despite the previous four quarters having consistent levels. 

Table 2: Second quarter first-time buyer lending and affordability measures

 

Number of loans

Value of loans £m

Loan size (£)

Income (£)

Loan-to-value

Loan-to-income

Interest payment as % of income

Capital and interest payment as % of   income

Second quarter 2015

8,000

880

101,515

34,000

83.3%

3.02

9.8%

17.2%

First quarter 2015

50.9%

 51.7%

94,795

33,677

84.7%

2.84

10.0%

17.0%

Second quarter 2014

5.3%

 11.4%

95,000

32,240

82.5%

2.98

9.9%

16.7%

Source: CML Regulated Mortgage Survey (April 2005 onwards)


Lending to first-time buyers

First-time buyers in Scotland typically borrowed 3.02 times their gross household income, up from 2.84 the previous quarter but less than the UK average of 3.38.

The typical loan size for first-time buyers was £101,515 in the second quarter, up from £94,795 in the first quarter. The typical gross income of a first-time buyer household was £34,000 also up compared to £33,677 in the first quarter.

First-time buyers' payment burden in the second quarter was 17.2% of gross income to cover capital and interest payments, up on the first quarter's 17.0% but lower than the 18.4% UK average.

Table 3: Second quarter home mover lending and affordability measures

 

Number of loans

Value of loans £m

Loan size (£)

Income (£)

Loan-to-value

Loan-to-income

Interest payment as % of income

Capital and interest payment as % of   income

Second quarter 2015

8,700 

1,250

133,000

50,809

75.3%

2.70

7.2%

16.4%

First quarter 2015

 29.9%

 13.6%

138,000

54,159

74.9%

2.61

7.4%

16.7%

Second quarter 2014

 0.0%

 0.0%

128,720

49,151

75.0%

2.70

7.9%

16.6%

Source: CML Regulated Mortgage Survey (April 2005 onwards)


Lending to home movers

Home movers in Scotland typically borrowed 2.70 times their gross household income, up from 2.61 the previous quarter but less than the same quarter last year and the UK average of 3.08.

The typical loan size for home movers was £133,000 in the second quarter, down from £138,000 the previous quarter and lower than the £160,994 UK average. The typical gross income of a home movers' household was £50,809, also down compared to £54,159 in the first quarter.

Home movers' payment burden in the second quarter saw them spend 16.4% of their gross household income to cover capital and interest payments, a slight change from 16.7% in the first quarter, but lower than the 18% UK average.

Chart 3: Number of home-owner remortgages

 Scotland lending trends press release Q2 2015 - Chart 3

Source: CML Regulated Mortgage Survey (April 2005 onwards)

Download the data

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

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. Data for the third quarter of 2015 will be released on Wednesday 25 November 2015.

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020 7438 8922

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