More Scots get on the property ladder as mortgage lending rises

MORTGAGE lending increased by 8 per cent in Scotland in the third quarter of 2011, according to new figures.

The number of loans for house purchase rose from 11,500 in the previous quarter to 12,400.

The rise reflected a wider UK trend, with lending for house purchase increasing by 16 per cent.

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The figures, released by the Council of Mortgage Lenders (CML) Scotland, also showed that loans to first-time buyers increased during the third quarter, up 7 per cent to 4,600, worth £429 million, an increase of 10 per cent – compared with UK rises of 13 per cent and 16 per cent respectively.

First-time buyers typically borrowed 80 per cent of their property’s value, up from 79 per cent in the second quarter, bringing the average loan-to-value ratio in Scotland in line with the UK average.

CML Scotland policy consultant Kennedy Foster said: “The mortgage market in Scotland is currently stable albeit at a low level.

“We anticipate growth is likely to remain slow going forward, although welcome developments, such as smaller deposits, have emerged and a Scottish mortgage indemnity scheme for new-build properties is being introduced.”

He said, however, that the uncertain economic outlook and low consumer confidence would mean that the Scottish mortgage market would, like the rest of the UK, remain “constrained”.