New scheme to help first-time buyers

Following the success of a similar scheme launched in 2013, the Strategic Housing Unit is planning to allocate around £1.5 million next year to the initiative, which would involve the States lending homebuyers 15 per cent of the value of their prospective property.

The buyer would be expected to provide a five per cent deposit as per the 2013 scheme. The loans would be provided for purchasing private properties on the open market. The Strategic Housing Unit hopes to secure the services of a professional lender to work in partnership with it on the scheme to provide mortgages to participants.

Tara Murphy, policy principal for the unit, said that the provision of loan deposits would be means-tested and targeted at Islanders who needed assistance to buy a home. ‘There will be an income cap. We don’t know where yet but we need to help people who wouldn’t be able to buy a home without the scheme,’ she said.

‘On the other side we don’t want to lend to people who wouldn’t be able to afford the mortgage repayments, as that would be irresponsible.’

She added: ‘If the scheme is successful, we hope to secure more money for it in the future.’

It is intended that participants in the scheme will either pay back their loan on the sale of the property or after their planned 25-year mortgage expires.

Ms Murphy said that the Strategic Housing Unit had not yet determined how the loans would be repaid at the end of the mortgage term.

She added that the scheme would most likely aim to help Islanders buy one- or two- bedroom properties. A decision on whether the deposits will be provided interest-free, as in 2013, is yet to be made.

About 50 families were assisted by the 2013 scheme, under which £3 million was provided by the States for deposit loans.

Finance firm Skipton, which provided the mortgages for the 2013 scheme, will not be acting as a lender for the new initiative due to commitments with the Island’s social housing provider, Andium Homes.

Earlier this year, the Jersey House Price Index, produced by the States Statistics Unit, identified that the cost of three- and four-bedroom homes had reached their highest ever level in Jersey.

The figures showed that the average price of a home in Jersey had risen by 44 per cent since 2005, while average salaries had only increased by 28 per cent during the same period.

The Housing Minister plans to lodge her proposition for the new deposit loan scheme by December this year.

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