CML: FTB activity increases in Scotland

Nia Williams

May 28, 2013

In the shorter term, 46% of those surveyed would like to buy a new home in the next 2-3 years (either first home or subsequent), and 37% of these think it is likely that they will be able to do so.

Separate data released today by the CML shows an increase in lending to first-time buyers in Scotland in the first quarter compared to the same period last year, while home mover lending and remortgage lending was subdued.

In the first quarter of 2013, a total of 4,500 loans were advanced to first-time buyers in Scotland. This represented a 10% increase on the first quarter of 2012 (4,100 loans) but there was a seasonal fall compared to the fourth quarter of 2012 (5,300 loans).

With lower house prices, first-time buyers in Scotland continued to borrow less relative to their income and spend a smaller proportion of their income on mortgage payments than in the UK. First-time buyers in Scotland typically borrowed 2.81 times their income and spent 17% of their income on mortgage payments, lower than the 3.23 times borrowed by first-time buyers in the UK who spent 19.5% of their income on mortgage payments.

However there was a fall in lending to home movers during the period. A total of 5,500 loans (worth £710 million) were advanced to home movers, compared to 5,600 loans (worth £730 million) in the first quarter last year. This represented a 24% fall on the fourth quarter of last year and a 2% fall compared to the first quarter in 2012, likely to be partly associated with the effect of the end of the first-time buyer stamp duty holiday in March last year.

Following a similar pattern to the UK overall, remortgage lending in Scotland continued to be subdued. A total of £570 million was advanced to borrowers remortgaging in Scotland in the first quarter, a 25% fall compared to the first quarter of 2012, and down by 20% compared to the previous quarter.

Iain Malloch, chair of CML Scotland, commented: “With most adults in Scotland still viewing home-ownership as their tenure of choice and with more high loan-to-value mortgages now available, conditions for borrowers looking to either buy or move home are continuing to improve.

“The announcement of a new-build shared equity scheme, the continuation of MI New Home and the launch of the Help to Buy scheme next year, should provide a further boost to the Scottish mortgage market.”

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