Boost from stamp duty exemption

Scottish first-time buyers bought higher-priced property than usual in the first quarter of 2012, taking advantage of the stamp duty concession, according to new figures released today by the Council of Mortgage Lenders in Scotland.

Some 38% of first-time buyers in Scotland bought property valued between £125,000 and £250,000, the bands exempt from stamp duty during the concession. This is the highest proportion since records began in 2005.

Due to lower house prices in Scotland, around 35% of first-time buyers usually buy property in these bands compared to 50% in the UK as a whole. Properties under £125,000 were still the most popular option in Scotland in the first quarter but, at 58% of first-time buyers buying within this band, this is the lowest since records began.

There were 4000 loans, worth £380 million, taken out by first-time buyers in Scotland in the first quarter. Despite the stimulus provided by the end of the stamp duty concession, this was a 9% fall in the number of loans and a 5% fall in the value compared to the previous quarter, but a rise of 21% by number and 31% by value compared to the first quarter of 2011. First-time buyers accounted for 42% of the house purchase loans in Scotland, the highest since 2001 and the same proportion in the UK as a whole.

Scottish first-time buyers typically borrowed 80% of their property’s value in the first quarter of the year, the same as the UK overall. The proportion of income spent on mortgage interest payments by first-time buyers increased to 11.4% in the first quarter from 11% in the previous quarter but was still lower than the proportion paid by first-time buyers across the UK (12.7%).

Lending to home movers followed a similar pattern to first-time buyers. The 5500 loans taken out, worth £720 million, was a fall of 24% (25% by value) from the last quarter, but a rise of 8% (11% by value) compared to the first quarter of 2011.

Overall, Scotland experienced a fall in lending for house purchase, as in the UK, in the first quarter of 2012. Some 9500 loans were taken out, worth £1.1 billion, down from 11,600, worth £1.4 billion, in the last three months of 2011, but up from 8400, worth £930 million, in the three months to March 2011.

Remortgage lending also dropped in the first quarter in Scotland and UK-wide. There were 7800 loans, worth £750 million, down from 9000, worth £880 million, the previous quarter and 8900, worth £850 million, in the first quarter of 2011.