SIGNS that the housing market was beginning to cool may just have been turned on their head, with gross UK mortgage lending rising from £22.1 billion in June to £23bn in July.

That represents a four per cent rise month on month and 7.5 per cent rise on the same month last year.

The picture is reflected in Scotland too, with the £2.5bn borrowed across 18,800 loans in the three months to the end of June representing a 35 per cent rise on the first quarter of this year and 18 per cent rise on the same period last year.

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But why, when inflation is rising and the economy is looking decidedly uncertain, the relative turnaround?

The reason, according to UK Finance Scotland Mortgage Committee chair Carol Anderson, is that first-time buyers are taking advantage of what now looks likely to be a limited period of low interest rates to secure a deal.

"There were more home buyers in Scotland in the second quarter of 2017 than any other quarter since 2007. First-time buyers have been a key driver of this, with two years of year-on-year growth,” she said.

"With an economic climate of low interest rates, government schemes and competitive mortgage deals, the Scottish market is in a good position and open to business going forward."

Alastair McKee, managing director of mortgage broker One 77 Mortgages, agreed and noted that while affordability remains an issue, the Government’s Help to Buy scheme as well as reduced competition from buy-to-let landlords is spurring first-time buyers on.

"First-time buyers are once again proving to be the driving force behind the property market,” he said.

"With many amateur landlords still reeling from the raft of punitive tax changes, first-time buyers are having a field day.

"The Help to Buy initiative is providing additional momentum, incentivising more and more people to make that first step onto the property ladder. Help to Buy is emboldening many first-time buyers like never before.”

Henry Woodcock, principal mortgage consultant at IRESS, said the situation is likely to continue, with many mortgage lenders continuing to offer low rates to first-time buyers.

“Lenders are still keen to attract new customers and continue to offer very competitive interest rate products,” he said.

“As a result, we could see increased first-time buyer and remortgage activity into the autumn months.”

Even with relatively small deposits first-time buyers can currently secure a rate as low as 1.5 per cent, with Yorkshire Building Society offering a 90 per cent mortgage at that level for a fee of £1,495.

While the rate is offered for an initial two-year period it is variable, meaning that when the Bank of England base rate begins to rise, as it is expected to do next year, the mortgage rate will increase too. At the end of the two-year period it will automatically increase to the building society’s standard variable rate, which is currently 4.74 per cent but by 2019 could be considerably higher.

The best fixed-rate mortgage currently on offer, according to price comparison site MoneySuperMarket, comes from Chester Building Society. For a fee of £1,695 borrowers can lock in a rate of 1.83 per cent for two years, with that rising to 4.74 per cent at the end of the period.

While that means someone borrowing £150,000 over 25 years for a house valued at £170,000 would initially pay £623.44 a month to Chester Building Society and just £599.90 to Yorkshire Building Society, with the former they would know that the sum would not increase during the initial term.

Although first-time buyers are driving the market for now, one issue that could hamper their activity is availability of stock, with homemovers accounting for just 51 per cent of the housing market compared with 64 per cent a decade ago.

Andrew Mason, mortgage products director at Lloyds Bank, said: “In the past year, the number of homemovers appears to have stabilised despite continuing low interest rates and rising employment.

“There are a number of factors which could be influencing this - more people are paying off their mortgages and not moving, with supply at historic low levels there could be a shortage of suitable homes coming on the market and the cost of moving house could be putting people off.

“This has meant that homemovers now account for just half of today’s housing market compared to a decade ago when it accounted for two-thirds of the market. This has a knock on affect for first-time buyers as there will be fewer properties available for them also.”