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 www.ukfinance.org.uk for wider content and updates from UK Finance.

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First-time buyer and remortgage activity grows year-on-year in Scotland in the first quarter

Published: 24 May 2017

In the first quarter:

  • Home buyers borrowed £1.8bn for house purchase, down 15% quarter-on-quarter but up 5% year-on-year. They took out 14,300 loans, down 14% compared to the previous quarter but up 6% on the first quarter 2016.
  • First-time buyers borrowed £810m, down 10% on the fourth quarter but up 25% on the first quarter last year. This totalled 7,600 loans, down 8% quarter-on-quarter but up 23% year-on-year. 
  • Home movers borrowed £1bn, down 19% quarter-on-quarter and 6% compared to a year ago. This totalled 6,700 loans, down 19% quarter-on-quarter and 8% compared to the same quarter in 2016.
  • Remortgage activity totalled £940m, up 9% on the fourth quarter and 21% on the same quarter last year. This came to 7,900 loans, up 11% quarter-on-quarter and 23% compared to a year ago.

Carol Anderson, CML Scotland chair, commented:

There tends to be a seasonal lull in lending in the first quarter of the year, and this year is no exception. Even so, competitive mortgage rates have spurred on a resurgence in remortgage activity which was at a five year quarterly high in Scotland. First-time buyer lending also showed an increase on the first quarter of last year.

The decline in home mover activity is not unexpected given the surge in activity last year to avoid the changes in Land and Buildings Transaction Tax, but we expect home buying activity to gain momentum into the summer months.

 Affordability in Scotland

First-time buyers typically borrowed £98,000 (£133,000 in the UK overall), down from £99,800 average the previous quarter. The average household income was £33,600 (£40,000 in the UK overall), unchanged form the previous quarter. The typical income multiple in Scotland of 3.01 (3.03 in the previous quarter) also compared favourably to the UK average of 3.53. 

Affordability metrics for home movers saw the typical amount borrowed this quarter was £139,500 (£175,000 in the UK overall), down from £140,000 the previous quarter. The average household income of a home mover was £50,000 (£54,600 in the UK overall), down from £50,800. This meant the typical home mover income multiple in Scotland was 2.83, up from 2.80 the previous quarter and the UK average of 3.34.

Chart 1: Number of loans to home-owners, 2007-2017

 20170522 Q1 2017 Scotland MLT chart 1

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 2016

6,200 7,300 6,400

Q4 2016

8,300 8,300 7,100

Q1 201

7,600 6,700 7,900

Change compared to Q4 2016

-8.4% -19.3% +11.3%

Change compared to Q1 2016

 +22.6%  -8.2%

+23.4%

Table 2: Value of loans for house purchase and remortgage

 

House purchase (£m)

Remortgage (£m)

  FTBs Movers Home owners

Q1 2016

650 1,100 780

Q4 2016

900 1,270 860

Q1 2017

810 1,030 940

Change compared to Q4 2016

-10.0% -18.9% +9.3%

Change compared to Q1 2016

+24.6% -6.4% +20.5%

20170522 Scotland Q1 2017 FTBs affordability infographic

20170522 Scotland Q1 2017 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 97% 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 second quarter of 2017 will be released on Wednesday 23 August 2017

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Gareth Hill

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