More shared equity schemes could help first-time buyers
There may be hope for some first-time buyers who find it difficult to get on the property ladder, with a new law opening the door for more shared equity schemes in Jersey, according to one of Bedell Cristin's associates.
Last week, the States released its House Prices Index for the fourth quarter, which saw Jersey house prices hit record levels.
The latest figures showed that more than 30 luxury homes over £2million were snapped up in 2017, rocketing by nearly 75% in comparison with three years earlier.
Last year, the turnover of properties was 7% higher than in 2016, an increase driven by a rise in flat sales, which were up by 26%. Meanwhile, the number of house sales declined by 6%.
In the same week, the States opened the door to a new shared equity scheme which will allow buyers to combine a small deposit with a lower-than-average mortgage, by providing the buyer with an ‘equity loan,’ which covers a percentage of the property’s value.
see Jersey property thriving. At the end of 2017, Jersey house prices were on par with London and all property types had increased in value. This is fantastic news for homeowners. However, buyers trying to get on the ladder or young families looking to move up the property ladder may be stifled.
"By way of example, since 2007 property prices have increased by 33% whilst earnings have increased by just 26%. As wage inflation lags behind housing inflation and lenders demand large deposits, first time buyers are finding it increasingly difficult to get on the housing ladder."
She added that a new law might help some trying to get on the property ladder “However, there may be hope for some first-time buyers as a new law was passed last week which opens the door for the use of shared equity schemes in Jersey. Shared equity schemes allow buyers to combine a small deposit with a lower than average mortgage size by providing the buyer with an ‘equity loan,’ which covers a percentage of the property’s value.
"The value of the equity loan generally fluctuates with the value of the property, so the amount the buyer pays depends on the value of the property at the time you repay. We will have to wait and see if the States use this opportunity to aid buyers.”