First time buyers in Scotland took out 6,500 loans, the largest total in a single quarter since the middle of 2008, according to the figures released by the Council of Mortgage Lenders.
A total of £630 million was advanced to first time buyers in Scotland in the second quarter of 2013, up 54% compared to the first quarter and up 40% compared to the second quarter last year.
With comparatively lower property prices than in the UK as a whole, first time buyers in Scotland continued to borrow less relative to income than in the UK as a whole. They typically borrowed 2.91 times their income up from 2.81 in the first quarter of the year but considerably lower than the 3.3 times borrowed by first time buyers on average in the UK.
The loan to value ratio increased slightly in Scotland for first time buyers, a trend seen UK wide, to 82% of the property value, in comparison to quarter one when it was 80%.
Alongside first time buyers, lending to home movers increased in the second quarter of 2013 in Scotland. There were 8,100 loans advanced to home movers this quarter which was an increase of 47% compared to the first quarter and up by 5% on the second quarter of 2012.
Total value of the loans also increased in Scotland accumulating to £1,100 million from £1,020 million in the second quarter of last year.
Lending for house purchases in Scotland overall increased in the second quarter with 14,500 loans being advanced, up by 45% compared to the first quarter of 2013 and up by 16% compared to the second quarter last year.
The value of these loans also increased. Lending for house purchases was worth £1,740 million in the second quarter, up in value by 55% on the first quarter of 2013 and by 16% over the same period last year.
Following a similar pattern to trends in the UK overall, Scotland saw remortgage lending to borrowers pick up in the second quarter of 2013 after a subdued period. In total, £770 million was advanced to borrowers remortgaging in Scotland which was up by 35% compared to the first quarter of the year and a slight increase on the £750 million advanced in the second quarter of 2012.
‘The positive growth in lending to both first time buyers and home movers has led to a welcome increase in lending for house purchases in Scotland,’ said Iain Malloch, chair of CML Scotland.
‘With comparatively lower prices in Scotland than in the UK as a whole, first time buyers are able to borrow less relative to income. There is clearly value in the Scottish market which provides a great opportunity to get on the housing ladder,’ he added.
