Scottish house purchase lending up 23 per cent in second quarter

According to the latest data from the Council of Mortgage Lenders, borrowers took out 16,500 loans between the end of March and the end of June, up 23 per cent on the previous quarter but down 4 per cent compared to the second quarter 2015.

While, first-time buyers borrowed £920 million, up 42 per cent on the first quarter and 2 per cent on the second quarter last year.

This equated to 8,500 loans, up 39 per cent quarter-on-quarter and 4 per cent year-on-year.

Home movers borrowed £1.2 billion, up 11 per cent quarter-on-quarter but down 5 per cent compared to a year ago.

This totalled 8,100 loans, up 11 per cent quarter-on-quarter but down 9 per cent on quarter two 2015.

Remortgage activity totalled £850 million, up 9 per cent both on the first quarter 2016 and the second quarter 2015. This came to 7,100 loans, up 11 per cent quarter-on-quarter and 4 per cent compared to a year ago.

Carol Anderson, CML Scotland chair, said: “First-time buyers continue to be a key driver in the market. This is the 19th successive quarter of growth in first-time buyers compared to a year earlier, and is the highest quarterly number of first-time buyer loans since mid-2007. So, although the data reflects pre-EU referendum, it suggests the Scotland market is in good shape and open for business moving forward.”

Affordability metrics for first-time buyers in Scotland remains better than for the UK overall.

The typical amount borrowed this quarter compared to the previous was £99,800 (£132,800 in the UK overall) , up from £97,800, and the typical average household income of a first-time buyers was £33,600 (£40,000 in the UK overall), up from £33,400. This meant the income multiple in Scotland was 3.03 an increase compared to 2.97 the previous quarter but lower than the UK average of 3.51.

Affordability metrics for home movers in Scotland similarly remain better than for the UK overall.

The amount borrowed this quarter was £139,500 (£167,400 in the UK overall), up from £136,000 the previous quarter, and the typical average household income of a home mover was £49,700 (£53,600 in the UK overall), down from £51,200. This meant the income multiple in Scotland was 2.84, up compared to 2.68 the previous quarter, but lower than the UK average of 3.26.