First-time buyers in Scotland return to pre-recession levels

The number of first time buyers has returned to pre-recession levels. Picture: TSPL

The number of first time buyers has returned to pre-recession levels. Picture: TSPL

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More first-time buyers in Scotland joined the property ladder between June and September this year since the same period in 2007 – before the global recession hit – a report has revealed.

People buying their first home also borrowed more this quarter than any other quarter since records began, according to the Council for Mortgage Lenders (CML).

The number of first-time buyers rose to 8,600 in the quarter, the highest since the third quarter in 2007, when 9,600 Scots became homeowners for the first time.

Overall, Scottish home buyers borrowed a total of £2.2 billion for house purchases, up 5 per cent quarter-on-quarter but down 5 per cent year-on-year. They took out 17,100 loans, up 5 per cent on the previous quarter but down 4 per cent compared with the third quarter 2015.

Carol Anderson, chairwoman of CML Scotland, said: “First-time buyers continue to be a key driver in the market with more loans advanced to new home-owners than any quarter since 2007.

“This quarter also saw a four-year high in remortgage activity and quarter-on-quarter growth in home movers, so all lending types have performed strongly over the summer months.

“This is the first quarter post the EU referendum and the market appears resilient so far. It may take time to fully gauge the full impact but currently the Scotland market is in good shape and open for business moving forward.”

Mortgage affordability reached a historic low in September, for both first-time buyer and home movers.

The study also revealed that the average age of a first-time buyer in Scotland is 29, just below the typical age of 30 in the rest of the UK.

Affordability metrics for first-time buyers in Scotland remain better than for the UK overall. First-time buyers took out an average loan of £100,000, typically 85 per cent of the property’s value and well below the UK average figure of £134,900.

The typical average household income of a first-time buyers increased slightly from £33,600 to £33,700, compared with £40,500 in the UK overall, taking the income multiple in Scotland to 3.02 – a slight decrease compared to 3.03 the previous quarter and lower than the UK average of 3.54.

Meanwhile, home movers borrowed £1.3bn, up 6 per cent quarter-on-quarter but down 11 per cent compared with a year ago. This totalled 8,500 loans, up 6 per cent quarter-on-quarter but down 12 per cent on quarter three 2015.

Remortgage activity totalled £890m, up 6 per cent on the previous quarter and 11 per cent on the same quarter in 2015. This came to 7,300 loans, up 4 per cent quarter-on-quarter and 11 per cent compared with a year ago.

UK-wide, home-owners borrowed £11.4bn for house purchase, down 7 per cent month-on-month but up 4 per cent year-on-year.

They took out a total of 62,900 loans, down 5 per cent on August but up 3 per cent on September 2015.

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