RBS promises £1.7bn of mortgage lending for Scotland

| March 11, 2009 | 0 Comments
RBS promises £1.7bn of mortgage lending for Scotland

Royal Bank of Scotland (RBS) has promised to provide £1.7 billion-worth of mortgage finance to Scottish homebuyers during 2008.

The lender will also continue to offer loans of up to 90% of a property’s value, which should help first-time buyers enter the market.

Buyer enquiries have risen nationally in the recent weeks as falling house prices and interest rates improve affordability and the bank has made it clear that it will support the Scottish housing market with further funds, if demand takes off.

The group’s chief executive of consumer banking, Paul Geddes, states: “Our message to customers in Scotland is very clear, we are now more than ever open for mortgage business.”

In return for taxpayer support, RBS had pledged to lend more to businesses and individuals.

Its contribution in the Scottish mortgage market should be particularly beneficial to first-time buyers because the credit crisis and recession have caused lenders to be ever more cautious and the 90% loan-to-value mortgage has virtually disappeared.

In February, the Council of Mortgage Lenders reported that Scottish house purchase lending declined 40% in 2008, compared to a fall of 50% across the whole of the UK.

Scotland accounted for a 12% share of the total number of UK house purchase loans, up from 10% in 2007.

However, the decline in house purchase lending in the region accelerated in the fourth quarter of last year with loans to Scottish first-time buyers totalling 4,300 in the three months to the end of December, down 19% on the previous quarter.

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