Scottish mortgage approvals dropped in 2010

Mortgage application form Loans for first time buyers were down 31% on the same period in 2009

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Mortgages approved for house purchase in Scotland in 2010 fell by just under 1% on the previous year, according to the Council of Mortgage Lenders (CML).

About 46,800 mortgage loans were approved in Scotland and there were 30,000 remortgage loans advanced, down 23% compared to 2009.

Scots borrowed 74% of their property's value, in line with the UK average rate of 73%.

Last year the UK as a whole saw mortgages increase by 3% from 2009.

Lending in Scotland accounted for 9% of total UK lending in 2009 and 2010.

In the fourth quarter, house purchase lending activity fell by 22% and remortgaging by 13% compared to the previous quarter.

For first-time buyers, the final three months of the year saw 3,800 loans approved - down 22% on the previous quarter and 31% down on the final quarter of 2009.

The year-on-year falls have been explained by the distorting effects of the artificial boost to beat the stamp duty holiday deadline in December 2009.

CML Scotland policy consultant Kennedy Foster said: "The root causes of the shortage of funding, increased capital requirements, particularly for high loan to value lending, and a lack of competition are constraining the market in Scotland, as in the rest of the UK".

Jonathan Fair, chief executive of home building industry body Homes for Scotland, said: "These statistics show a mortgage market still in decline, particularly as far as first time buyers, our industry's lifeblood, are concerned".

He added: "With more than a 50% fall in the number of home purchase loans since 2007, the stark reality is that as many as 146,000 Scots households have been prevented from accessing the home of their choice.

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