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Continued growth in first-time buyer lending

First-time buyers in Scotland took out 6,500 loans in the second quarter of 2013, up 33% over the same period last year and the largest total in a single quarter since mid-2008, according to figures released by the Council of Mortgage Lenders (CML).

A total of £630 million was advanced to first-time buyers in Scotland in the second quarter of 2013, which was up 54% compared to the first quarter and up 40% compared to the second quarter last year.

With comparatively lower property prices than in the UK as a whole, first-time buyers in Scotland continued to borrow less relative to income than in the UK as a whole. First-time buyers in Scotland typically borrowed 2.91 times their income, up from 2.81 in the first quarter of the year but considerably lower than the 3.3 times borrowed by first-time buyers on average in the UK.

The loan to value ratio increased slightly in Scotland for first-time buyers, a trend seen UK-wide, to 82% of the property value, in comparison to quarter one when it was 80%.

“The positive growth in lending to both first-time buyers and home movers has led to a welcome increase in lending for house purchases in Scotland,” commented Iain Malloch, chair of CML Scotland.

“With comparatively lower prices in Scotland than in the UK as a whole, first time buyers are able to borrow less relative to income. There is clearly value in the Scottish market which provides a great opportunity to get on the housing ladder.”

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