Scottish homes are selling more quickly than those in the rest of the UK, 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 per cent in number and 42 per cent in volume from the first quarter. The UK as a whole experienced an increase of 26 per cent in volume and 25 per cent in value. Despite this, the proportion of house purchase loans in Scotland stayed static at nine per cent 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 per cent by volume and 37 per cent 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 per cent of their property’s value in the second quarter, up from 77 per cent in the previous quarter. This in now closer to, although still below, the average of 80 per cent 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 per cent to 71 per cent, 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.”
