Home buyer lending in Scotland up 35% in Quarter 2 of 2017

With low interest rates, government schemes and competitive mortgage deals, the Scottish market is in a good position 

The UK’s finance and banking trade body has revealed that there were more home buyers in Scotland in the second quarter of 2017 than any other quarter since 2007 – with growth driven mainly by first-time buyers.
UK Finance, which was formed on 1 July 2017 to represent Britain’s finance and banking industry, has revealed the following for the second quarter in Scotland:
  • Home buyers borrowed £2.5bn, up 35% quarter-on-quarter and 18% year-on-year. They took out 18,800 loans, up 30% compared to the previous quarter and 15% on the second quarter 2016.
  • First-time buyers borrowed £1.1bn, up 29% on the first quarter and 17% on the second quarter last year. This totalled 9,500 loans, up 25% quarter-on-quarter and 15% year-on-year.
  • Home movers borrowed £1.5bn, up 39% quarter-on-quarter and 20% compared to a year ago. This totalled 9,300 loans, up 37% quarter-on-quarter and 16% compared to the same quarter in 2016. 
  • Remortgage activity totalled £900m, down 7% on the first quarter but up 7% on the same quarter last year. This came to 7,300 loans, down 10% quarter-on-quarter but up 4% compared to a year ago.
Carol Anderson, Chair, UK Finance Scotland Mortgage Committee, said: “There were more home buyers in Scotland in the second quarter of 2017 than any other quarter since 2007. First-time buyers have been a key driver of this, with two years of year-on-year growth.
“With an economic climate of low interest rates, government schemes and competitive mortgage deals, the Scottish market is in a good position and open to business going forward.”
Affordability in Scotland
First-time buyers typically borrowed £101,600 (£137,700 in the UK overall), up from £98,230 average the previous quarter. The average household income was £33,600 (£40,800 in the UK overall), down from £33,700 the previous quarter. The typical income multiple in Scotland was 3.09 (3.01 in the previous quarter), which compared favourably to the UK average of 3.58.
Home movers borrowed an average of £141,100 this quarter (£178,200 in the UK overall), up from £139,500 the previous quarter. The average household income of a home mover was £51,000 (£55,100 in the UK overall), up from £50,000. This meant the typical home mover income multiple in Scotland was 2.84, up from 2.83 the previous quarter and the UK average of 3.37.
Chart 1: Number of loans to home-owners, 2007-2017
Source: UK Finance Regulated Mortgage Survey
Table 1: Number of loans for house purchase and remortgage
 
House purchase
Remortgage
FTBs
Movers
Home owners
Q2 2016
8,300
8,000
7,000
Q1 2017
7,600
6,800
8,100
Q2 2017
9,500
9,300
7,300
Change compared to Q1 2017
+25.0%
+36.8%
-9.9%
Change compared to Q2 2016
 +14.5%
+16.3%
+4.3%
 Table 2: Value of loans for house purchase and remortgage
 
House purchase (£m)
Remortgage (£m)
FTBs
Movers
Home owners
Q2 2016
910
1,210
840
Q1 2017
820
1,040
970
Q2 2017
1,060
1,450
900
Change compared to Q1 2017
+29.3%
+39.4%
-7.2%
Change compared to Q2 2016
+16.5%
+19.8%
+7.1%