Scottish builders have voiced concerns over the latest data from the Council of Mortgage Lenders, which shows a 19% drop in borrowing activity for home movers.
Home movers borrowed £1bn, down 19% quarter-on-quarter and 6% compared to a year ago. This totalled 6,700 loans, down 19% quarter-on-quarter and 8% compared to the same quarter in 2016.
Home buyers borrowed £1.8bn for house purchases overall, down 15% quarter-on-quarter but up 5% year-on-year. They took out 14,300 loans, down 14% compared to the previous quarter but up 6% on the first quarter 2016.
First-time buyers borrowed £810m, down 10% on the fourth quarter but up 25% on the first quarter last year. This totalled 7,600 loans, down 8% quarter-on-quarter but up 23% year-on-year.
Chief Executive of industry body Homes for Scotland Nicola Barclay said, “Whilst it is great to see First Time Buyer activity up around a quarter on the same period last year, today’s figures also highlight an annual fall for home mover lending which raises concerns given the need for a healthy housing market across all segments.
“This would appear to underline our concerns regarding the impact of the Land & Buildings Transaction Tax with feedback from our members continuing to suggest that potential buyers of homes in higher bands are deferring the decision to move because of the additional sums payable compared to the old Stamp Duty system. We will continue to monitor this market activity and share any ongoing concerns with the Scottish government.”
Carol Anderson, CML Scotland chair, said, “There tends to be a seasonal lull in lending in the first quarter of the year, and this year is no exception.
“The decline in home mover activity is not unexpected given the surge in activity last year to avoid the changes in Land and Buildings Transaction Tax, but we expect home buying activity to gain momentum into the summer months.”
Picture credit: Nathan O’Nions