Taylor Scott International News
Mortgage activity in Scotland saw a rise of 39% in the second quarter of 2015 and is also up 3.1% year on year, according to the latest data from the Council of Mortgage Lenders. It is outperforming other areas of the UK which have seen only a small quarterly rise and indeed the Scottish market saw the highest number of loans to those purchasing a home since the second quarter of 2008. A breakdown of the data shows that the value of first time buyer loans increased by 52% in comparison to the first quarter of 2015 and 11% year on year. The number of first time buyer loans is up 51% on the first quarter of 2015 and 5% on the second quarter of 2014. The data also shows that first time buyers account for 48% and home movers 52% of all house purchase lending activity and typically borrowed 3.02 times their gross household income, up from 2.84 the previous quarter but less than the UK average of 3.38. The typical loan size for first time buyers was £101,515 in the second quarter, up from £94,795 in the first quarter while the typical gross income of a first time buyer household was £34,000 also up compared to £33,677 in the first quarter. First time buyers' payment burden in the second quarter was 17.2% of gross income to cover capital and interest payments, up on the first quarter's 17% but lower than the 18.4% UK average. Home owner house purchase activity came out of the traditional seasonal dip in the first quarter to see large growth in numbers both quarter on quarter and, to a lesser extent, year on year. Remortgage lending rebounded out of a stagnant period to total the highest volumes since the last quarter of 2013. ‘After three quarters of consecutive decline, it is welcome to see house purchase levels in Scotland bounce back finally. This quarter saw the highest number of loans to those purchasing a home since the second quarter of 2008,’ said Kennedy Foster, CML policy consultant for Scotland. ‘With competitive mortgage deals, better affordability than the UK overall and the replacement of stamp duty with a new taxation system that benefits the majority of borrowers, it appears conditions are relatively favourable at the moment in Scotland for those looking to buy a home,’ he added. According to Christine Campbell, managing director of Your Move Scotland, activity may have been boosted by the revised stamp duty system in Scotland by providing a helping hand. ‘Since its introduction house purchase loans have soared to a seven year high, after a staggering 39% quarterly leap. Scottish buyers are eagerly making the most of the new tax savings available, and we’ve seen property sales rise 25% month on month in June,’ she explained. She believes that any rise in interest rates will be put back even further by the current turmoil in the finance markets due to the slowing Chinese economy and the current… Taylor Scott International
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