Last week, Metro Bank announced the expansion of its mortgage business into Scotland, after observing that the majority of Scottish borrowers were open to switching to new providers for their mortgages.

Metro Bank research found that over half of Scottish respondents (56%) were keen to shop around when looking to buy a home, while only 18% would stick with their current bank.

Just 21% of respondents believed that lenders were doing enough to help first-time buyers.

There have been signs that the Scottish market is also an opportunity for property investors and professional landlords.

This month, the expat lending arm of Skipton Building Society announced it was now accepting applications for buy-to-let lending in Scotland.

Late last year, Edinburgh-based master broker Thistle Finance officially launched to support brokers in the UK, particularly in the underserved markets of Scotland and Northern Ireland.

Is the Scottish market attractive to new entrants?

“There's currently a greater buzz about the Scottish market than there has been for years,” said Mark Dyason, managing director at Thistle Finance.

“Metro Bank's decision to lend north of the border comes hot on the heels of Kensington Mortgages' decision to re-enter the Scottish market for the first time in a decade.

“The Scottish market holds two key attractions for specialist lenders seeking to broaden their client base – low volatility and less competition.

“Scottish house prices have typically been less volatile than those in England.”

Mortgage borrowing in Scotland grew 15% year-on-year to £2.55bn in Q3 2017, according to research by UK Finance.

Meanwhile the average Scottish rental price increased by 2.2% in the year to November 2017, according to data from Your Move.

“While volumes in Scotland are low compared to the densely populated parts of England, there is also much less competition,” Mark added.

“Many specialist lenders don't lend north of the border at all, while others have a patchy approach, where they will lend in some Scottish postcodes, but not others.

“Scotland's different legal system does impose some initial cost on England-based lenders keen to spread their wings north of the border.

“But the one-off legal cost of creating a Scotland-compliant product can be quickly recouped by the opening up of an entirely new market.”

Are specialist banks already operating in Scotland?

As well as Metro Bank, Cambridge & Counties has recently completed deals in Scotland while Al Rayan offers a Scottish BTL property finance range.

Buster Tolfree, commercial director of mortgages at United Trust Bank (UTB), said it's mortgage division had actively lent in Scotland since day one and it held longstanding relationships with the leading master brokers and specialist distributors as a result.

“The bank's asset finance division has also funded Scottish SMEs for many years through its [support of] brokers.

“While a different legal framework to England and Wales in terms of property lending, the quality of lending in Scotland is just as strong as elsewhere in the UK.

“The bank will continue to lend against properties and assets in Scotland and look forward to developing even stronger ties with brokers and customers over the border.”