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Scottish homeloan approvals fall to 16-year low
House purchase loans in Scotland in 2009 dropped to their lowest level in sixteen years, according to the Council of Mortgage Lenders (CML).
The trade body said the 47,000 house purchase loan approvals which were advanced over 2009 was 23% down on 2008.
However, house purchase activity picked up in Q4 2009 and the Scottish market saw a 9% increase. There were 14,200 loans for house purchase in Q4 worth £1.6bn – up 4% by number and 5% by value from Q3.
The number of first-time buyers in Scotland was unchanged at 5,400 in Q4 but the value of lending to these first-time buyers increased in Q4 from £474m to £479m. Home movers saw a rise in activity from 8,400 loans worth £1bn in Q3 to 8,800 worth £1.1bn in Q4.
In line with the rest of the UK, remortgaging volumes remain low in Scotland. There were 9,000 remortgage loans worth £900m in Q4- down from 10,000 worth £1bn in Q3 and from 16,000 worth £1.6bn in Q4 2008. For the whole of 2009, there were 39,000 loans worth £4.4bn for remortgage, down from 74,000 worth £7.4bn in 2008.
Kennedy Foster, CML Scotland policy consultant, said that while funding conditions remain challenging, he expected an increase in activity later in 2010.
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He added: “A combination of bad weather in the early part of the year and the end of the Stamp Duty holiday will also have affected housing market activity, and will reinforce the slow start to 2010. However, the situation is much improved on a year ago, and a gradual improvement in market conditions and the wider economy should support a modest increase in activity later in the year.”