First time buyers in Guernsey may find it a little easier to get on the housing ladder as Skipton International has brought back 100% mortgages.
Prospective homeowners have said it is difficult to buy since a global economic downturn in 2015 when such mortgages were withdrawn, and Guernsey saw a decline in the island's housing market.
However, now the property market has strengthened enough that the firm's 100% LTV Next Generation Mortgage is returning, in response to eight quarters of growth in the Guernsey property market.
The first Next Generation Mortgage was launched in 2010 to help first and second-time buyers buy a property. It allows family members to assist with the purchase of a home without making a financial gift, by instead providing a guarantee to the Bank. Skipton took the decision to withdraw the product in 2015 following a decline in house prices but the bank is now confident that conditions are stable enough to support its return.
Pictured: Shane Konken, Skipton International
Shane Konken, Mortgage Associate at Skipton International, said: “We feel that now is the right time to reintroduce this product for our customers. The property market is in a good position and we want to do what we can to support those who have difficulty in pulling together a deposit."
"At Skipton, we have always had a responsible approach towards lending, offering the right products at the right time to ensure that our borrowers never end up in a negative equity position.”
The Next Generation mortgage will require family members to guarantee up to 15% of the purchase price of the property. Skipton can grant loans of up to £500,000, provided the borrower meets Skipton’s standard underwriting criteria. This mortgage product is only available through direct application to Skipton.
Nigel Pascoe, Director of lending at Skipton International said: "We had to withdraw the mortgage in 2015 because we didn't want to encourage negative equity for first time buyers. The main change that has happened since then is the levelling and improving in the pricing of the Guernsey property market, which has stabilised and going in the right direction so we have decided to reintroduce 100% mortgages for the benefit of first time buyers."
Talking about the statistics that have led to this Mr Pascoe said: "Looking at property transactions; property purchase bonds last year are the highness since 2007 in addition the number of property purchase bonds last year was up by 9% from 2016 and the highness since 2012. The number of property purchase bonds has risen by a third since the low point of 2015.
Pictured: Tim Roberts, Director at Shields and Rutland
Commenting on the bigger picture, Tim Roberts; director at Shields and Rutland Estate agents, said: "We saw a really positive second half of 2017 with regards to the number of sales and we are pleased it is continuing into 2018. It is a positive indicator for the property market in Guernsey."
Responding to his thoughts on the return of the 100% mortgage Mr Roberts said: "Any opportunity to change lending conditions is positive for those looking to buy a property and the market in general."
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