Recent figures from the Council of Mortgage Lenders (CML) have revealed that there were 7,500 first-time buyer loans in Scotland in the third quarter of 2014. This is a fall of 1% on the previous quarter, but 15% up on Q3 2013.
In total, first-time buyers in the period borrowed £810 million - up 1% on the previous quarter and 23% on Q3 2013. This was apparently the highest quarterly total lending value since mid-2008.
The CML explains that this may be partly the result of first-time buyer affordability, with first-time buyers typically borrowing 2.94 times their gross income. This is less than the 2.98 income multiple in the second quarter and less than the UK average of 3.41.
The typical loan size for first-time buyers was £98,307 in the third quarter, up from £95,000 in the previous quarter. The typical gross income of a first-time buyer household was £33,516 compared to £32,273 in the second quarter.
The relatively low level of interest rates saw first-time buyers' payment burden remaining relatively low in the third quarter, with 17.3% of gross income being spent to cover capital and interest payments. This is higher than 16.7% in the second quarter but a smaller proportion of income than the 19.6% UK average.
“The past two quarters have seen the highest house purchase lending levels in Scotland since 2008, suggesting the market has remained robust over the past six months, despite the new FCA mortgage market rules introduced in April,” commented Linda Docherty, chair of CML Scotland. “The surge in first-time buyer lending has been one of the stories of Scotland's economic recovery.”
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