Pierre from SPF, Steve from The Guernsey Housing Association and Matt from Cooper Brouard joined John Randall for their monthly property and finance discussions.
Pierre starts the discussion by talking about SPF’s latest initiative in which his colleague, Gary Wallbridge, has been delivering mortgage talk to students at the Guernsey College of Further Education. He explains that this has been very well received by the students and have had enquiries to replicate with other schools. The talks have also led to various social media debates, questioning mortgage payments, product availability on island and debt consolidation. Pierre responds to the question of debt consolidation by explaining that certain banks will not ‘roll in’ unsecured consumer debts such as credit cards and personal loans. Any banks that do offer this, do so at a maximum level.
Pierre suggests that banks remain keen to lend, but for first time buyers, the big issue is securing a deposit. He believes that this is set to improve, with a likely new product to be available where a bank will offer 95% loan to value mortgages. Although not really in the first-time buyers market, (unless the ‘Bank of Mum and Dad’ are involved), Marsden which entered the Guernsey mortgage market last year are doing well and have been well received.
With the Guernsey Housing Association subject to recent scrutiny on social media, due to their rigorous application process, Pierre is keen to defend the association, describing them as ‘doing a great job in helping first time buyers, who could not otherwise get onto the main housing market’.
Steve Williams from the GHA joins the conversation by explaining why the application process for housing is as ‘rigorous’ as it is. He tells us that in order for the association to help ‘the right people’, careful screening has to take place, in order for a decision to be made. This process is based upon information provided by the applicant such as bank statements, occupation, marital status etc. Steve stresses that without this process, many people who could otherwise afford ‘main market’ housing, could use the GHA service, thus potentially taking away business from both estate agents and developers.
John questions why so many people pay as much for rent as they would for a mortgage, in which Pierre explains that as in most cases, it is purely down to not being able to secure a deposit. Whilst many people may be able to afford a mortgage ‘on paper’, banks are not keen to accept a deposit that has been borrowed. They are however happy to lend if the deposit has been gifted by parents, for example. With this being the case in many first-time buyer scenarios, a number of parents take out a bond, to rank behind the bank as security, as this still acts as a ‘gift’ and is also there to protect the gift if their child and partner were to separate. John asks if equity release is ever an option, in Guernsey? But whilst this is not offered here, Pierre tells him that lenders such as The Marsden, can offer mortgage options up to the age of 80 plus.
Matt is next to contribute to the discussion by telling us that house sales are currently good, with the market seeing a 4% increase in Local Market house prices, which he believes proves that the market is much ‘healthier’, compared to previous years and of course, is good news for homeowners. With Matt suggesting that now is a good time to buy, John asks if landowners, for example, may see changes in the regulations on building on vacant field plots. Matt is doubtful that planning permission will become more lenient, and on this topic, the guests discuss some of Guernsey’s slightly more controversial developments.
Steve continues by talking us through the new island development plan, which outlines the various urban and green zones. With developer confidence being described as relatively low at the moment, owing partly to both lending issues and building costs themselves, building activity is not particularly high at present. Consumer confidence, however, has certainly improved compared to this time last year.
The guests then talk about the current mortgage application process, and what the banks are looking for, with Pierre suggesting that they are very much willing to lend, if their criterias are met.
Property prices are discussed, with Matt and John reminiscing about how you could purchase a three bedroomed, semi-detached house for around £10k, back in 1976. This comes after various debates have been started on social media, calling for Guernsey house prices to be lowered, to offer first-time buyers a better chance of getting onto the property ladder. It is agreed amongst the guests, however, that such actions would not result in a positive outcome.
With many, seemingly ‘abandoned’ or unoccupied houses, scattered around the island, John asks if these property owners will ever be forced or encouraged to develop or sell these properties? Matt and Steve explain that this is a highly doubtful outcome, in the near future, especially as far as GHA involvement is concerned.
The conversation is wrapped up with news of the Havelet Waters development selling well, with another apartment recently being acquired and an investment property also being let out. There has been a steady flow of enquiries and to date, three property sales have been completed. Steve talks us through both the current and future development intentions for the GHA and tells us that all is going to plan, with a recent development open day, proving highly successful.
You can listen to the discussion in full here: https://www.bbc.co.uk/programmes/p06yv0v7