Mortgage market update

This is an important time for the local property market, as the Bank of England Base Rate is predicted to increase to 4.50% by the middle of May, whilst the latest results from the Jersey House Price statistics will be released later in the month.

After a very slow start in the first quarter, there is more activity in the market and vendors seem to be acknowledging the fact that their properties no longer have the value they had enjoyed up until Autumn last year.

It would seem from the consensus of opinion from agents that we have spoken to, that prices have fallen between 15% and 20%, although this will be confirmed in due course by the quarterly figures produced by the States’ Statistical Office. The Quarter 1 figures should be released later this month, although the full impact of price reductions is unlikely to be seen until the end of Quarter 2.

It is also apparent that the Buy to Let market has virtually ground to a halt as increased purchase costs linked to higher BTL mortgage rates no longer make an investment viable unless the buyer does not need a mortgage.

Nick Dodsley, the chair of the Jersey Estate Agents Association has commented: ‘’Vendors are dropping their asking prices, but there remains a distinct difference in the market from previous years. The unfortunate intervention of the Government in the property market by introducing a buy to let / second home stamp duty of 3% has not helped either the sales, or the letting market, or young Vendors seeking to sell their apartments, as its imposition has taken a ready pool of buyers out of the market.’’

Following a look at the property currently listed for sale in Jersey, it is interesting to see that there are 1271 listings of apartments and houses being advertised, of which 350 are for apartments below the £500,000 ceiling, which is generally regarded as being the maximum purchase for most First Time Buyers.

What is of greater interest is the fact that there are also 74 three-bedroom houses currently listed at under £700,000 –a clear indication that vendors are now acknowledging that prices have reduced. This is very encouraging for many, who may have previously thought that they would never be able to buy a house.

The last piece in the jigsaw is the availability of mortgages in a market, that has tightened up significantly since last Autumn, and whether to opt for a variable tracker rate or lock into a 2 or 5 year fixed rate.

This is where The Mortgage Shop can help. The team can advise on the maximum a purchaser can expect to borrow and which bank will offer the best overall mortgage option, having factored in each lender’s own unique underwriting criteria, to ensure the best chance of a positive outcome. They can help organise the raft of documents that will be required, obtain approval, help you to also organise the essential life assurance, and be available to offer you advice and support right through to your day of completion.

Rates correct at 04/04/23

For all mortgage enquiries, from First Time Buyers, Home movers or re-mortgagers, bridging finance and development funding, the professional team at The Mortgage Shop is available to offer advice and solutions that cover the whole of the market – call us on 789830

We can consider all local lenders and options, so your perfect mortgage search starts and ends right here.

With 100s of different mortgages at our fingertips, why not let us do the hard work and shop around to find the best mortgage option that works for you? We won’t stop there, we will be right with you every step of the way, to make sure buying your dream home goes smoothly.