Mortgage lending fall continues

The average Scot borrowed 75% of the property's value in the third quarter

Mortgage approvals in Scotland fell by 18% in the third quarter of 2008, according to the latest figures.

However, the Council of Mortgage Lenders said Scotland still accounted for 12% of new UK house purchase lending - another record high.

There were 5,300 loans, worth £481m, to first-time buyers in the three months to September, down from 6,600 loans worth £622m in the previous quarter.

The typical first-time buyer put down a deposit of 16%, the statistics showed.

A total of 15,100 house purchase loans were granted in Scotland, an 18% fall on the previous quarter.

A similar decline was experienced across the UK in the same period.

The quarterly statistics revealed that the average Scot borrowed 75% of the property's value in the third quarter, and 2.78 times their income, down from 77% and 2.88 in the second quarter of 2008.

'Intervention needed'

Interest payments consumed 18.2% of the average first-time buyer's income, edging down from a peak of 18.9% in the fourth quarter of 2007.

Remortgaging also declined in the third quarter, with 18,000 loans approved, worth £1.9bn.

The Council of Mortgage Lenders (CML) said remortgaging may remain subdued as borrowers coming to the end of fixed-rate deals revert to attractively priced variable rates.

CML policy consultant Kennedy Foster said: "The year-on-year decline in house purchase lending has been less pronounced in Scotland.

"As the Crosby report recognised earlier this week, intervention is needed to restore the availability of mortgages and we hope to see its recommendations implemented swiftly.

"This would help address the mortgage supply issues, but consumer demand for loans will continue to fall away in the weaker economic outlook."