/ Author: SPF

Our Managing Director Pierre Blampied gives his insights on the John Randall BBC Radio Guernsey Show. He and the other members of the property panel are keen for the States to act on KPMG’s Housing Report.

Pierre commented that it had been a busy couple of months for lending, but that he’d also had to focus attention on the KPMG Housing Report. He met with the States as they are due to debate the report in July. Pierre agreed with developer Charles McHugh’s comments in the media, to the effect that it was now over a year since the report came out to the public and it was time to get on and make some decisions.

Since the report there have been significant changes in Guernsey’s lending landscape. Barclays have entered the mortgage market and have been lending aggressively, now ranking as number one house purchase lender for the year. This has had a positive impact on the market.

Matt from Cooper Brouard said they had also been busy and that a number of conveyancing clerks on Court Row echoed his sentiments. It is the feedback that they’ve been giving over the last month or so and is a pretty good indication that there are property deals being undertaken.

Pierre said that the funding of the deposit is the major issue for first-time buyers and he remains convinced a first-time buyers deposit scheme is what is required. The States need to consider this. Banks are lending good salary multiples in the region of five times joint or sole incomes.

Steve said that he understood hesitancy from the States on intervening in the market as the last thing they would want to do by stepping in was to hype the market, pushing up the prices for everybody, so properties become less affordable across-the-board. The panel agreed that there would always be a question of how many people can you help and how much does it cost, but that support for housing is important to the island as a whole as it does fuel other industries.

Pierre asked if one of the problems facing the Guernsey Housing Association was that people were not moving on and Steve acknowledged that while some would never be able to enter the private sector others (24 so far) had moved. In terms of developments, firstly in respect of the Guernsey Housing Association, the Warry’s site was completed, Guelles Road is in progress and after that a small development of nine was scheduled in St Saviours. Meanwhile, in the private sector Matt stated the old Guernsey Brewery site is progressing well and although show-houses are ready the site as a whole is not yet at a point where viewings can take place.

Steve asked if he (Matt) felt that if document duty were to be removed if it would make a difference. Matt felt it might as first-time buyers in particular have no impetus to ‘buy now’, in a static market but that it would probably be a short term solution as the States would again be wary of overheating the market.

Pierre was less positive about the impact. His experience was that there were large numbers of first-time buyers wanting to push ahead but without the ‘bank of mum and dad’ they were unable to do so. They then end up renting which further delays their ability to save and purchase.

His opinion was that the States were right to back the Guernsey Housing Association option however, they now needed to look at other solutions that can work alongside of it. Whether they want to scrap document duty, get rid of the bond fee, fund a first-time buyers fee scheme or offer a guarantee what they must do is make a decision and get on with it.

Steve mentioned U.K.’s Help-to-buy ISA. People put their savings into a specific ISA and the government also contributes. The ISA can only be used to buy property so people can’t decide at the end to blow it all on a luxury holiday. The panel agree that savings culture has changed and that it wouldn’t be a bad thing to remind people if they really wanted to buy property, then they need to make that a priority.

John asked if Barclays had had an impact on other lenders and Pierre felt that it had with Skipton and Lloyds also lending more. NatWest though had probably been securing less of the market and as such would be aiming to be more competitive.

In summary, both mortgage and house sales have been good. Barclays has had a positive impact on lending and people who need to up or downsize will continue to move. There is confidence in the market but everyone is keen for the States to press ahead with some form of assistance in order to really kickstart the property market and, in turn, the wider economy.