The number of loans for mortgages slumped by more than a third in the second quarter of the year. However, interestingly the Scottish mortgage market is faring better than the rest of the
UK, the data showed.According to the Council of Mortgage Lenders (CML), the number of loans for house purchase in Scotland slumped 34 per cent year on year to 18 ,500 in the second quarter. That compared to a 46 per cent year-on-year slump for the UK as a whole.

There were 19,000 re-mortgage loans worth £1.9 billion, down 5 per cent in the first three months and 22 per cent lower than the second quarter last year. Despite a sharp increase in Scottish house prices in the past five years, the longer term gains have been smaller, so property is relatively more affordable north of the Border.But the favourable comparison with the UK position should not be cause for complacency. There is going to be a downturn and it is not going to be insignificant.
 
First-time buyer numbers continue to dwindle, said the CML, with 6,600 loans in the second quarter representing a 31 per cent drop from the same period last year.

THE biggest price-comparison sites are moving further into the sub-prime loan market. Moneysupermarket, the UK’s largest comparison website, has started advertising an unsecured personal loan with a rate of 59.6%.

The Everyday Loans product is offered to those with poor credit histories provoking fierce criticism from debt charities.

Other top comparison sites plan to target sub-prime borrowers. Uswitch will begin marketing sub-prime unsecured loans more prominently this autumn, while Gocompare is in talks with sub-prime loan providers to publish data on unsecured adverse credit loans.The Consumer Credit Counselling Service has said the sites are targeting vulnerable consumers, in pursuit of greater profits.

“Comparison sites are drawing more traffic, and promoting sub-prime loans could lure those with a history of severe credit problems into taking on hugely expensive debt. It’s important vulnerable people seek proper financial advice, something these sites may not offer.”

Consumer groups have queried the independence of comparison sites. Most charge commission to providers often at varying rates, which has raised questions about their interest in plugging certain products. Sites may levy commission when consumers click through to a provider’s website, others receive it when consumers apply for or buy a product.

Moneysupermarket has said: “There is a market for these loans for people who have a poor credit rating, which can arise from missing an occasional payment or not being on the electoral roll.”

The site charges the same commission to all loan providers, they said.

The highest rate of 59.6% is generally applied to small loans of up to £2,500, he said. Someone borrowing that over one year would pay £872 in interest, repaying £281 a month.