Scottish Mortgage Better Than UK
Scottish mortgage market slighter better than its UK counterpart
The slowdown which the Scottish mortgage market is experiencing is however, not too harsh to the north of the border as revealed by the latest figures of Council of Mortgage Lenders, Scotland. There has been an 18 per cent rise in home loans in the second quarter of 2008 as compared to only 5 per cent in the rest of the UK. However, there has been a fall of 34 per cent from last year in the same quarter which is less than the UK decrease which is of 46 per cent. Though the mortgage lending showed signs of a downfall in the last quarter all across the UK from 2007 and has been falling constantly since then, in Scotland this fall has been less compared to the UK. Home purchase loans in the UK were at 8 per cent at the beginning of 2007 while that figure is now at 12 per cent. The number of first time buyers is also on the rise. The previous quarter witnessed a rise of 5 per cent which is however, lower by 31 per cent in the same quarter last year. Over the years, the lending conditions have increased and therefore first-time buyers with small deposits find it difficult to enter the field. A year ago, the average first time buyer deposit was 10 per cent while this year it is 13 per cent.
The average price of a house is relatively less compared to the UK house price and therefore mortgage is easily available in Scotland than in the rest of the UK. In Scotland, individuals took home loans for 2.88 times their income in the second quarter, compared to 3.12 across the UK. On an average a borrower in Scotland spends about 16.9 per cent of his income on paying off mortgage interests, compared to 18.1 per cent in the rest of UK.
The market of mortgage lending is definitely on the slowdown trail all over the UK due to paucity of funds but the slowdown is much less in Scotland according to CML chairman. According to other experts the market is very shaky at the moment and needs government support.
