According to the Council of Mortgage Lenders (CML) the credit crunch is having far less of an impact in Scotland than the rest of the UK.

Scotland saw a 20% fall in loans for house purchasers in Q1 2008 compared to a 40% fall in the UK as a whole. The figures also showed that Scotland saw an increased share in the total number of home loans for the UK from 8% in Q1 2007 to 11% in 2008.

The CML believes this is due to continually affordable house prices in Scotland which are 25% lower than the average in the UK. The fact that house prices are more affordable has the knock on effect that Scottish borrowers typically had a smaller income to mortgage interest payment ratio. The average percentage of income used for mortgage interest payments was 16.9% in Scotland and 18.5% in the UK.

Kennedy Foster, Scotland policy consultant for CML, told PIN: “Affordability is much better in Scotland, which puts buyers at an advantage as they have a much better chance of getting a mortgage.”

When PIN asked if more could be done to continue to support the housing market, Foster added “Given the difficulty facing first-time buyers the Government needs to continue to invest in new-build and Open Market Homestake schemes. Shared equity schemes are good products that help people to make their first steps onto the property ladder.”