News: Scottish Property Market Shows Signs Of Recovery

Wed, 24 Feb 10

The housing market in Scotland is recovering slowly, according to latest figures released by the Council of Mortgage Lenders.

The figures show that there were 14,200 mortgages for house purchases worth a total of  £1.6bn agreed during the fourth quarter of last year. This is a rise of 4% by number and 5% in value from the preceding three months.

Compared to the same period in 2008 the figures are up 22% in volume and up 19% by value.

Despite the turnaround in fortunes for the Scottish property market the recent rise is still slower than a rise seen across UK as a whole.  Loans for home purchases rose by 9% across the UK between the third and fourth quarters of 2009.

Remortgage activity in Scotland and the rest of the UK continues to remain low. There were 9,000 remortgage loans agreed in the fourth quarter in Scotland, down from 10,000 during the previous three months and markedly down on the final three months of 2008 when 16,000 remortgages were agreed.

CML Scotland policy consultant Kennedy Foster said: We do not anticipate an increase in lending activity immediately. Funding conditions remain challenging, economic recovery is fragile both in Scotland and in the UK as a whole, and with little likelihood of interest rates rising this side of an election, many on low variable rates have little incentive to remortgage.

 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.

By Joe Lepper

See also: Mortgages, Life Insurance and Mortgage Protection Guide

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