Bank rules ‘mean that mortgage holders lose out
Saturday 13th December 2008, 9:58AM GMT.
JERSEY’S top 500 bank policy might help big business, but it is leaving ordinary people with a poor deal, says the boss of Jersey Home Loans.
Rob Procter (pictured) said that the Island government’s decision not to let his company take deposits in Jersey meant that mortgage holders were losing out. He added, for example, that JHL was unable to pass on interest rate cuts to Islanders who had discounted variable mortgages with the company.
Borrowers in the UK with similar mortgages with the Kent Reliance, which owns JHL, have, however, seen their repayments drop by more than 0.8 per cent. Mr Procter said that Jersey mortgage holders were being disadvantaged at the moment because of the States’ intransigence.
JHL has been consistently refused permission to open up as a bank in Jersey and take deposits from savers because it is not in the list of the top 500 world banks. For its application to be considered to take deposits, a bank must be in the top 500. If the bank clears that first hurdle, there are other tests it must pass.
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The whole idea in having these rules in place is to avoid the mistakes that Guernsey have made with banks like Northern Rock. At a time when we are witnessing some banks going down this precautionary rule is a good thing.
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maybe jhl and the housing department could work together here to bring local families an affordable mortgage.
house prices are over inflated due to greed and no control of who buys what.
unlike guernsey where they have a percentage of housing for sale to allcomers and the rest is for locals.(if i am wrong correct me please)
i for one am glad that mr le main is still the minister of housing as he is the only politician to do somthing for the ordinary working people of jersey trying to buy a home .
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It is because of this company and their 100% mortgages that house prices in Jersey are so inflated. Prices need to start falling as they are in the UK.
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JTM, you forget that some of the largest banks in the world have only survived becuase they have been bailed out by governments. Being in teh Top500 didn’t make them immune, in fact, they led teh credit crucnh.
25% of Jersey mortgage holders are paying more because if this decision. The rate cuts were to boost the economy but this has not happened in Jersey.
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When I bought my house 2.5 years ago not only did JHL give me the best rates but they were the only provider to actually offer me a mortgage for a house. As I didn’t want to buy one of the thousands of empty flats it was them or nothing.
JHL are the only provider that offer a service tailor made for the unique market in Jersey and if they pull out completely there will be a gap that won’t get filled. Shouldn’t the States be supporting instead of ousting them?
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P Lee’s comments that the inflated house prices in Jersey are the fault of JHL is the most rediculous comment I think I have ever read on thisisjersey.com (and there are some beauties) surely the high house prices in Jersey is down to supply and demand, much like the pricing of any commodity.
Therefore if there is not a lot of for example 3 bedroom houses,
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Most banks would be very cautious about lending in to the Jersey housing market at the moment.
It is on a huge multiple of the average income and the island is effectively a one horse town.
If even one or two of the largest banks decided that they had to shed staff the impact would be immediate and severe.
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Actually MB I would say he has it spot on. Just like Northern Rock with its 125% mortgages JHL came to the Island and offered to lend more than anyone else. That’s how it ended up with something like 25% of the market when it is just a small UK building society. With banks now requiring 10% deposits and sticking to sensible multiples of say 4 times salary and no new JHL lending then prices come down. It is the supply of credit that is the key here as a house is only worth what a willing buyer and seller agree and most buyers require a mortgage.
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Dave Brown – you are partly wrong.
Although i think anyone can buy any housing, most of it requires you to be “Qualified” before you can live in it. For a new-comer to get quallies they have to live on the Island for 12 years.
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Kay, yes they need to be qualified to live in A-H or A-J.
Those who has money buy can buy those to rent them out. Don’t need any qualification for that, just the funding. Also crated the shortage as a result. Since many locals (A-H) has been living the island, it should help somewhat.
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Seeing as our new economic development minister is an estate agent I guess minor rules like this will soon be trashed. Panic seems to run through the venture capilists over here when their beloved house prices look like dropping. To hell with the people that cannot afford them, that doesn’t come into it to them.
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hi kay, in guernsey they have open market housing,
which is a persentage of the housing stock.
and also a market for locals.
they also have work permits.
on the radio the other day there was talk of what to do with the money in dormant accounts, and its was said that it maybe earmarked for public services,
it could fund a new states loan scheme.
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