Number of first-time buyers in Scotland increases

First-time buyers are on the increase. Picture: Andrew Stuart/TSPL
First-time buyers are on the increase. Picture: Andrew Stuart/TSPL
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THE number of first-time property buyers in Scotland has increased, according to a mortgage survey.

Last year, 13 per cent more people bought their first home than in 2011, said the Council of Mortgage Lenders in Scotland (CML Scotland).

The total of 19,000 is the highest number of first-time buyers in Scotland since 2008, when there were 22,100.

Both the number of first-time buyers and the value of loans granted to them increased in each quarter of 2012, the highest since the fourth quarter of 2009, according to the survey.

In the fourth quarter of last year, the number of first-time buyers rose from 4,000 to 5,200. The figure marks an 18 per cent increase on the same period of 2011, while the value of loans increased from £380 million to £490m.

Lower house prices made first-time buyers in Scotland exempt from stamp duty, with 62 per cent buying a property for less than £125,000, compared with 39 per cent in the UK overall for the fourth quarter of last year, the report said.

Scotland’s first-time buyers also borrowed less relative to their income than in the UK as a whole, and spent a smaller proportion of their income on mortgage payments. First-time buyers in Scotland typically borrowed 2.88 times their income, while the figure for the whole of the UK was 3.26 times income.

On a quarterly basis, lending to first-time buyers and those looking to remortgage also increased. The recovery in the number of first-time buyers in Scotland may seem to lag behind the rest of the UK, but can be explained by the apparent initial resilience of the Scottish market to the economic crisis.

This meant it did not fall as quickly as the rest of the UK and has therefore had to make greater increases to rise above 2008 levels, which the UK has already surpassed.

Iain Malloch, chairman of CML Scotland, said: “The Scottish housing market showed positive signs of recovery in 2012, broadly following the pattern seen in the rest of the UK.

“The availability of mortgages at more than 90 per cent loan-to-value has more than doubled in the last two years and lenders expect to offer more high loan-to-value mortgages this year. This, and the fact that the number of first-time buyers is at a post-crunch high, suggests that lenders really are open for business.”

However, Conservative housing spokesman Alex Johnstone said: “While this rise is welcome, there is a real danger we’ll see a bottleneck forming of those looking to move up the ladder.

“A significant number of families are struggling to get from their first property up to a bigger home. As that continues, there will be fewer first-time properties coming on to the market.”

Two Scottish housing associations are in talks over a partnership agreement to improve services to tenants and service users.

The Irvine Housing Association, the Scottish subsidiary of social housing and regeneration organisation Riverside, has held preliminary discussions with Barony Housing Association.

A consultation process is under way with tenants, service users, members and staff.