Home-ownership is the long-term tenure of choice for most Scottish adults according to findings released by the Council of Mortgage Lenders based on a survey undertaken by YouGov.
78% of adults in Scotland would like to be home-owners in 10 years time according to new research undertaken by YouGov, on a par with the rest of Great Britain.
In the shorter term, 46% of those surveyed would like to buy a new home in the next 2-3 years (either first home or subsequent), and 37% of these think it is likely that they will be able to do so.
Separate data released today by the CML shows an increase in lending to first-time buyers in Scotland in the first quarter compared to the same period last year, while home mover lending and remortgage lending was subdued.
First-time buyers
In the first quarter of 2013, a total of 4,500 loans were advanced to first-time buyers in Scotland. This represented a 10% increase on the first quarter of 2012 (4,100 loans) but there was a seasonal fall compared to the fourth quarter of 2012 (5,300 loans).
Distortions caused by the end of the stamp duty holiday in March last year were less pronounced in Scotland than in the UK overall. Lower house prices in Scotland, on average, means that a larger proportion (typically around 60% compared to 40% in the UK) of first-time buyers in Scotland buy properties valued at less than £125,000 – below the stamp duty threshold.
With lower house prices, first-time buyers in Scotland continued to borrow less relative to their income and spend a smaller proportion of their income on mortgage payments than in the UK. First-time buyers in Scotland typically borrowed 2.81 times their income and spent 17% of their income on mortgage payments, lower than the 3.23 times borrowed by first-time buyers in the UK who spent 19.5% of their income on mortgage payments.
As in the UK overall, first-time buyers typically borrowed 80% of their property’s value.
Home movers
While there a year-on-year increase in lending to first-time buyers in Scotland, there was a fall in lending to home movers.
A total of 5,500 loans (worth £710 million) were advanced to home movers, compared to 5,600 loans (worth £730 million) in the first quarter last year. This represented a 24% fall on the fourth quarter of last year and a 2% fall compared to the first quarter in 2012, likely to be partly associated with the effect of the end of the first-time buyer stamp duty holiday in March last year.
House purchase lending
Despite the slight fall in home mover lending, the rise in the number of first-time buyers contributed to a small increase in house purchase lending compared to the first quarter last year. A total of 9,900 house purchase loans (worth £1.1 billion) were advanced in Scotland in the first quarter.
Remortgage lending
Following a similar pattern to the UK overall, remortgage lending in Scotland continued to be subdued. A total of £570 million was advanced to borrowers remortgaging in Scotland in the first quarter, a 25% fall compared to the first quarter of 2012, and down by 20% compared to the previous quarter.
Iain Malloch, chair of CML Scotland, said: “With most adults in Scotland still viewing home-ownership as their tenure of choice and with more high loan-to-value mortgages now available, conditions for borrowers looking to either buy or move home are continuing to improve.
“The announcement of a new-build shared equity scheme, the continuation of MI New Home and the launch of the Help to Buy scheme next year, should provide a further boost to the Scottish mortgage market.”
