Home-owner house purchase in Scotland decreased in the final quarter of 2014 to 15,000 loans, down 6% on the third quarter and 3% on the fourth quarter of 2013. These loans reflected lending of £1.9bn, down 6% compared to the third quarter but up 1% on the fourth quarter 2013.
Overall in 2014, the total number of loans advanced for home-owner house purchase was 59,300, which was up 9% compared to 2013. These loans aggregated to £7.5bn, an increase of 15% compared to 2013.
First-time buyer affordability changed slightly in Scotland quarter-on-quarter with first-time buyers typically borrowing 2.90 times their gross income, less than the 2.94 income multiple in the third quarter and less than the UK average of 3.38.
The typical loan size for first-time buyers was £97,200 in the fourth quarter, down from £98,600 in the previous quarter. The typical gross income of a first-time buyer household was £33,965 compared to £33,520 in the third quarter.
The relatively low level of interest rates saw first-time buyers' payment burden remaining relatively low in the third quarter at 16.8% of gross income being spent to cover capital and interest payments, higher than the third quarter's 17.3%.
Home mover affordability changed fractionally, with home movers typically borrowing 2.64 times their gross income compared 2.62 in the third quarter and to 3.03 for the UK overall.
The typical loan size for home movers was £128,244 in fourth quarter, down from £130,000 in the previous quarter. The typical gross household income of a home mover was £50,773 in fourth quarter compared to £50,971 in the third quarter.
Home movers' payment burden remained relatively low in Scotland at 16.5% of gross income being spent to cover monthly capital and interest payments, less than the 16.9% in the third quarter and considerably less than the 18.4% UK average.
The number of remortgage loans declined in the fourth quarter to 5,700 loans (£650m), which was down 3% in volume but unchanged in value on the third quarter. Compared to the fourth quarter of 2013, activity was down 17% in volume and down 13% in value. This is the joint lowest performing quarter for remortgage lending since our data began in 2005, alongside the second quarter of 2014 and the first quarter of 2013.
Overall for 2014, remortgage lending in Scotland was 23,400 loans reflecting a value of £2.6bn. This was 14% down in volume compared to 2013, and 9% down in value. This is the lowest performing volume levels for remortgage in a year since our data began in 2005.
Linda Docherty, chair of CML Scotland, commented:
“More people bought a home in Scotland last year than in any year since 2008, with a pronounced increase in first-time buyer activity in particular. As in the UK overall, there was a quarter-on-quarter dip in activity in the final quarter of the year. However, with inflation being low, employment increasing and there being signs of growth in household income we believe there are grounds for optimism for continuing growth, albeit at a likely slower rate.
"The introduction in Scotland of Land and Buildings Transaction Tax, replacing stamp duty from April, should help provide a boost to the housing market, which could see half of new borrowers paying no tax when purchasing a home.”
