CML: Second quarter sees larger increase in house purchase lending in Scotland than UK as whole
Wednesday, 24 August 2011 4:56 PM
SECOND QUARTER SEES LARGER INCREASE IN HOUSE PURCHASE LENDING IN SCOTLAND THAN UK AS WHOLE
House purchase lending in Scotland rose by more than the UK as a whole in the second quarter of 2011, according to new data from the Council of Mortgage Lenders. 11,300 loans for house purchase, worth £1.3 billion, were taken out in the second quarter of 2011 in Scotland, a rise of 36% in number and 42% in volume from the first quarter. The UK as a whole experienced an increase of 26% in volume and 25% in value. Despite this, the proportion of house purchase loans in Scotland stayed static at 9% of the UK total, unchanged since the end of 2010.
The number of loans to first-time buyers rose from 3,300 (worth £280 million) in the first quarter to 4,300 (worth £384 million) in the second. This was a larger increase at 30% by volume and 37% by value than the increase experienced by first-time buyers UK-wide. Home mover lending also increased by more in Scotland. 7,000 loans (worth £905 million) were advanced to home movers in Scotland compared to 5,100 loans (worth £628 million) in the first quarter.
Scottish first-time buyers typically borrowed 79% of their property’s value in the second quarter, up from 77% in the previous quarter. This in now closer to, although still below, the average of 80% in the UK as a whole. First-time buyers also took out loans on average 2.9 times their income, up from 2.84 in the first quarter but below the 3.19 seen UK-wide.
The lending criteria for home movers do not tend to fluctuate as much as for first-time buyers. From April to June the typical loan-to-value ratio for Scottish home movers increased marginally from 70% to 71%, and now stands one percentage point higher than the UK-wide average.
While in the rest of the UK remortgage activity fell in the second quarter, in Scotland it remained virtually unchanged. There were 8,900 remortgage loans taken out compared to 8,800 in the first quarter. The value of the loans was again £900 million.
Kennedy Foster, policy consultant for CML Scotland, said:
“We have seen the expected seasonal increase in mortgage activity in Scotland in the second quarter of 2011, but levels of mortgage activity remain at low levels by historical standards. With the uncertain economic outlook we expect this to continue for the rest of the year."
DOCUMENTS ATTACHED
SC1: House purchase lending: Scotland – UK comparison
SC2: Scottish mortgage lending and affordability, house purchase
SC3: Remortgage lending: Scotland – UK comparison
NOTES TO EDITORS
1. The Council of Mortgage Lenders' members are banks, building societies and other lenders who together undertake around 94% of all residential mortgage lending in the UK. There are 11.3 million mortgages in the UK, with loans worth over £1.2 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 2011 will be released on Thursday 24 November 2011.
CONTACT
Jayne Chichester - 020 7438 8922
Sue Anderson- 020 7438 8924
NIGHT/WEEKEND CALLS ONLY
Jayne Chichester - 07983 388764
Sue Anderson- 07983 388755
CML PRESS OFFICE
twitter: www.twitter.com/cmlpressoffice
Newsletter sign up