‘Housing limbo’ warnings as Scottish first time buyer lending falls 23 per cent

In the first quarter of 2015 first-time buyers took out 5,400 loans, 23 per cent down on the fourth quarter of 2014. These were worth £580 million, down 24 per cent on the final quarter of last year.

However while the number of loans decreased 7 per cent compared to the same period last year the amount borrowed increased by 2 per cent.

Loans to homeowners were also down compared to the final quarter of 2014. There were 6,700 loans valued at £1.1 billion down 17 per cent in volume and 6 per cent in value but they were up by 5 per cent in volume and 24 per cent by value compared to the same period last year.

The total number of remortgage loans was 5,900 up 4 per cent on the fourth quarter of 2014 and down 3 per cent on the same period last year. These totaled £660m, up 2 per cent on the fourth quarter of last year and down 1 per cent compared to the same period in 2014.

Homes for Scotland expressed concern at the report and warned that the country faced being left in “housing limbo” following the early closure of the hugely successful Help to Buy (Scotland) scheme, which helped those looking to buy new homes up to £250,000 overcome the difficulties associated with large deposits.

Karen Campbell, director of policy at the trade body, said: “With first-time buyers the lifeblood of our industry, today’s figures represent the fourth consecutive quarterly fall and therefore make for disappointing reading indeed.

“Coming just a day after the early closure of the Help to Buy (Scotland) scheme which successfully supported 5000 sales, they underscore the need for continuing Scottish Government support.

“They also emphasise the significant disadvantage that buyers and builders in Scotland now face compared to elsewhere in Britain with both England and Wales extending their schemes to not only meet the obvious demand that exists but also facilitate the building of much needed new homes with all the wide-ranging social, economic and environmental benefits this brings.

“It is therefore imperative that the Scottish Government gives a clear and early signal of its intentions on the matter if Scotland is to avoid being left in housing limbo.”