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Mixed picture on mortgage lending in Scotland, according to CML

The latest figures from the Council of Mortgage Lenders (CML) shows a mixed picture in Scotland, with first time buyer activity down on a quarterly basis, but up on the same quarter last year, while remortgaging activity was also up.

In highlights of its latest figures, the CML revealed:

  • Home buyers borrowed £1.8bn for house purchase, down 15% quarter-on-quarter and 5% year-on-year. They took out 14,300 loans, down 14% compared to the previous quarter and 6% on the first quarter 2016
  • First-time buyers borrowed £810 million, down 10% on the fourth quarter but up 25% on the first quarter last year. This totalled 7,600 loans, down 8% quarter-on-quarter but up 23% year-on-year
  • Home movers borrowed £1bn, down 19% quarter-on-quarter and 6% compared to a year ago. This totalled 6,700 loans, down 19% quarter-on-quarter and 8% compared to the same quarter in 2016
  • Remortgage activity totalled £940m, up 9% on the fourth quarter and 21% on the same quarter last year. This came to 7,900 loans, up 11% quarter-on-quarter and 23% compared to a year ago

“There tends to be a seasonal lull in lending in the first quarter of the year, and this year is no exception,” said Carol Anderson, CML Scotland’s chair. “Even so, competitive mortgage rates have spurred on a resurgence in remortgage activity which was at a five year quarterly high in Scotland. First-time buyer lending also showed an increase on the first quarter of last year.

“The decline in home mover activity is not unexpected given the surge in activity last year to avoid the changes in Land and Buildings Transaction Tax, but we expect home buying activity to gain momentum into the summer months.”

First-time buyers typically borrowed £98,000 (£133,000 in the UK overall), down from £99,800 average the previous quarter, the CML said. The average household income was £33,600 (£40,000 in the UK overall), unchanged from the previous quarter. The typical income multiple in Scotland of 3.01 (3.03 in the previous quarter) also compared favourably to the UK average of 3.53.

Affordability metrics for home movers saw the typical amount borrowed this quarter was £139,500 (£175,000 in the UK overall), down from £140,000 the previous quarter. The average household income of a home mover was £50,000 (£54,600 in the UK overall), down from £50,800. This meant the typical home mover income multiple in Scotland was 2.83, up from 2.80 the previous quarter and the UK average of 3.34.

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