Home BANKING & FINANCE PERSONAL FINANCE Mortgage lending in Scotland rises sharply

Mortgage lending in Scotland has risen at a higher rate that the UK as a whole in the second quarter of 2011, according to new data.

The Council of Mortgage Lenders (CML) said loans worth £1.3billion were taken out – an increase of 42% on the previous quarter.

This compared to a 25% rise in the UK as a whole.

The number of loans in Scotland rose by 36% to 11,300, compared to a UK-wide increase of 26%.

However, CML Scotland added that mortgage activity remained “at low levels by historical standards”.

The latest data showed that the number of loans to first-time rose from 3,300 (worth £280m) in the first quarter to 4,300 (worth £384m) in the second.

This was a larger increase at 30% by volume and 37% by value than the increase experienced by first-time buyers UK-wide.

Scottish first-time buyers typically borrowed 79% of their property’s value in the second quarter, up from 77% in the previous quarter but still below the average of 80% in the UK as a whole.

First-time buyers also took out loans on average 2.9 times their income, up from 2.84 in the first quarter but below the 3.19 seen UK-wide.

Kennedy Foster, policy consultant for CML Scotland, said: “We have seen the expected seasonal increase in mortgage activity in Scotland in the second quarter of 2011, but levels of mortgage activity remain at low levels by historical standards.

“With the uncertain economic outlook we expect this to continue for the rest of the year.”

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