Scottish mortgage market stabilising
Tuesday 1st September 2009
Mortgage lending in Scotland has improved somewhat in recent months. New figures from the Council of Mortgage Lenders has revealed a healthier outlook for the Scottish mortgage market with a 50% increase in purchase mortgage loans being taken out in the second quarter of 2009.
According to the CML’s figures, house purchase loan approvals have increased to some 11,400 from 7,600 from the first quarter. The increase can be attributed to First time Buyers entering the market and home owners moving properties with both markets up over 50% on the first quarter of 2009.
Remortgaging however has remained subdued with 9,000 remortgages worth close to 900 million pounds. Comparing these figures against the first quarter’s figure of 11,000 remortgages valued at 1.6 billion pounds, its clear indication borrowers are opting to stay with their lender’s Standard Variable Rate rather than remortgage.
Other data released from the CML remains relatively static with the average first time buyer deposit remaining at 25% and the average loan amount dropping 1% to 70% of property value. Income multiples experienced a marginal increase for home movers and first time buyers; 2.51 to 2.55 and 2.74 to 2.85 respectively.
Policy Consultant at CML, Kennedy Foster, is quoted saying, “Lending in the Scottish mortgage market is beginning to stabilise, albeit at very low levels. This is encouraging and mirrors the pick up in the housing market. But it will be a slow path to full recovery with significant obstacles presented by the restricted access to mortgage funding, fewer active mortgage lenders in the market, rising unemployment and limited consumer demand."