THE Island’s biggest mortgage lender has closed business to new customers.
Jersey Home Loans, which is part of the Kent Reliance Building Society, told brokers last week that they would only accept applications from existing customers for the foreseeable future.
The change is likely to slow down the housing market and increase demand for properties to rent, say specialists.
The news comes only a month after Jersey Home Loans said that they would only offer mortgages to people who could afford a 25% deposit.
Prior to last month the building society were offering to lend 90% of the total cost of a property and had been relatively ‘flexible’ about the amount loaned in relation to the earnings of house purchasers.
Rob Procter, deputy chief executive of Kent Reliance (pictured), said that the decision to close to new business had been taken partly because the building society was not allowed to raise funds in Jersey through its savings products.
The States of Jersey only allows the world’s top 500 banks to accept deposits from savers.
Article posted on 20th August, 2008 - 2.59pm
9 Article Comments
and what will the States do now? we recently heard that 41% of share transfer flats are owned by buy-to-let speculators from outside jersey hence driving up prices for locals.
if the States in any way subsidise the property market then they are effectively giving jersey taxpayers money to property speculators from outside the island!
and by the way dandara has far too much of an economic interest in this island.
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Not sure if this will have much of an affect on property prices in Jersey as all the other lenders are still providing at the normal rates.
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I think this will have a significant effect on house prices. Although the mainstrem lenders are still offering ‘normal’ rates, they are not offering the same size mortgages as JHL did. My mortgage is with JHL and I know there is no way the big 4 would have offered as much as JHL did. My opinion is that the success of JHL over the last 2 years has contributed to rapid rise in house prices in Jersey. Apparantly house prices have increased significantly with a steep rise within the last 2 years – coincidence ? Maybe…
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kez – if they are offering the same deals they are missing a trick given the additional demand they will have.
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The primary cause of the current property crash in the UK is a return to more sensible lending criteria in terms of both salary multiples of c 3.5 and minimum deposits of 5 or 10 %. Jersey will be just as mush affected by this change as anywhere else (e.g UK, Ireland, Spain etc) which has experienced a massive property bubble. It should be apparent that the current situation with an average house at c 480k and average salary of c 40k is completely unsustainable. The Jersey housing market has been propped up by the by-to-let investors with prices having increased far above what most first time buyers could afford a long long time ago. Now with the credit lines tightening you will see lending in Jersey come down to 4 or 5 times salary (higher still than the UK because of Jersey’s lower tax rates) and substantial deposits required. House prices will as a result start to fall in response and we will see the back of some of these opportunist BTLs. A good thing to – property should first and foremost be a place to live and not an investment to get rich quick !
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I hate what Jersey has become – a small version of London. I am married with two children and am Jersey born but will never be able to buy here now. We have a joint income of £40k but with my rent being £1650 a month (because I earn too much to have a States property) we will never be ale to raise a deposit or be given a mortgage for what we need. I love this Island and wanted to raise my family here but the capitalists are killing any chance of local families being able tp make a home here. When are the government going to WAKE UP !?
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When I was speaking to a Jersey Bean last year they were really bullish and said that Jersey is different and we won’t see a credit crunch etc…
Ah! Jobs are starting to go and now mortage worries are hitting Jersey along with high prices and inflation… How long before the Jersey beanies accept that jersey is just as open in the credit crunch as any other country… The Island is built on finance and still lets finance control the Island…. When the bubble bursts I for one will be able to pack up and go but not my Beanie mate!
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‘property should first and foremost be a place to live and not an investment to get rich quick !’
erm…. how many locals have gotten rich quick from renting overpriced properties to non quals?
Jersey’s prices have always been high and will always be high, there’s a supply/demand here that doesn’t happen in the UK. At the worst the prices will level out for a few years, very much doubt they will drop!
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Perhaps I have misunderstood, but I thought that a stop was going to be put to outside investors purchasing Jersey properties.
But at the Dandara website, they are actively seeking investors for their Jersey properties under construction:
http://www.dandara.com/investors/
http://www.dandara.com/Jersey-growth-stats.html
They boldly claim:
*High rental yields driven by a strong, growing economy
*Due to the Island’s Housing Qualifications, a high proportion (27%) of the working population must rent property
*A high proportion of the Island’s employers will pay an employee’s rent as part of their salary package
*The States of Jersey Government are actively pursuing policies to expand the working population and increase economic growth .
How on earth are locals supposed to buy properties when prices are spiraling out of control, fueled by outside by to let?
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