Increase for Scottish mortgage lending in third quarter of 2011

24 November 2011

House purchase lending in Scotland increased by 8% in the third quarter of 2011, according to new data published by CML Scotland today.

There were 12,400 loans for house purchase taken out, up from 11,500 in the previous quarter. In the UK as a whole, lending for house purchase increased by 16%.

Loans to first-time buyers and home movers in Scotland increased in the third quarter. There were 4,600 loans advanced to first-time buyers, worth £429 million, up 7% by volume and 10% by value (in the UK, the rise was 13% by volume and 16% by value). Home movers took out 7,800 loans, worth £1,033 million, an increase of 8% by volume and 12% by value (in the UK, the rise was 19% by volume and 23% by value).

There were small improvements in lending criteria for all Scottish house purchasers in the third quarter. First-time buyers typically borrowed 80% of their property's value, up from 79% in the second quarter, bringing the average loan-to-value ratio in Scotland in line with the UK average.

Home movers borrowed on average slightly less of their property's value from July to September than April to June – 70% compared to 71% but they spent 8.8% of their income on mortgage interest payments, the lowest since records began in 2005.

In the third quarter a total of 9,600 remortgage loans, worth £900 million were taken out, a 5% increase on the second quarter (no change in the value). Compared with the same period last year, this was a 20% increase by volume (13% by value), a smaller rise than the UK as a whole where remortgage activity grew by 23% (24% in value).

CML Scotland policy consultant Kennedy Foster commented: "The mortgage market in Scotland is currently stable albeit at a low level. We anticipate growth is likely to remain slow going forward, although welcome developments, such as smaller deposits, have emerged and a Scottish mortgage indemnity scheme for new build properties is being introduced. The uncertain economic outlook and low levels of consumer confidence will likely result in a continuing constrained mortgage market in Scotland as in the UK in general.”

SC1: House purchase lending: Scotland – UK comparison
SC2: Scottish mortgage lending and affordability, house purchase
SC3: Remortgage lending: Scotland – UK comparison

Notes:

Source: CML Regulated Mortgage Survey

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.

Data for the final quarter of 2011 will be released on Friday 24 February 2012.

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