Lending up 26% to first-time buyers in Scotland

Published:  30 November, 2009

SCOTLAND: Mortgage lending to first-time buyers increased 26% in the third quarter of 2009, according to the Council of Mortgage Lenders Scotland.

There were 5400 first-time buyer loans in the third quarter, up from 4300 in the previous quarter and unchanged from the third quarter of 2008.

There were 8300 home mover loans worth £1bn – up 15% from 7200 in the second quarter but 15% lower than the same quarter a year earlier.

In all, 13 700 house purchase loans were taken out, a 19% rise from the second quarter, but 10% down on the third quarter of last year.

In the UK, house purchase activity grew 31% in the quarter and was up nearly a quarter year-on-year.

The tightening in lending criteria stabilised earlier this year, and in the third quarter Scottish homebuyers typically borrowed 73% of the property's value, unchanged from the previous quarter and the same as in the wider UK market.

Income multiples increased modestly for the second consecutive quarter, with Scottish buyers typically borrowing 2.7 times their income, compared with 2.92 across the UK.

CML Scotland policy consultant Kennedy Foster said: "From peak to trough, house purchase activity in both Scotland and the UK has fallen by around 75%, but the timing has been different. Scotland has lagged behind the UK more widely, first during the decline in lending, and now in its weak recovery."

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