First-time buyers in Scotland at the head of surge in home loans

LONDON’S housing market slowed sharply in the summer, industry figures show, while the market perked up in Scotland and Wales.

The overall UK market is still rising fast, with a total of £11.8bn of mortgages approved in July, an increase of 15pc on the same time a year ago, according to the British Bankers’ Association.

Mortgages to fund home purchases increased 11pc to £7.8bn, while remortgages rocketed by 29pc on the year to £4.1bn as home owners race to get a better deal before interest rates go up.

On a quarterly basis, Scotland was revealed to be a major driver of the surge in lending.

House purchase lending there jumped by 39pc in the second quarter, the Council of Mortgage Lenders (CML) said.

First-time buyers in Scotland accounted for £880m of borrowing in the three-month period, up 52pc on the previous quarter and 11pc on the previous year. Remortgaging also increased 21pc on the year to £760m.

“After three quarters of consecutive decline, it is welcome to see house purchase levels in Scotland bounce back finally. This quarter saw the highest number of loans to those purchasing a home since the second quarter of 2008,” said the CML’s Kennedy Foster.

Similarly, overall mortgage borrowing in Wales also shot up 29pc from the first quarter to £1.2bn in the three months to June, though lending in the country held flat on the year. Remortgaging drove the increase, rising 9pc on the quarter and 16pc on the year to £370m.

By contrast, the London market is down on the year.

Lending to first-time buyers fell 10pc on the year to £2.7bn, while lending to home-movers dropped by 9pc to £2.8bn.