Jersey Government announces financial support for first-time buyers

The Government of Jersey announced a new 'shared equity assisted purchase initiative' on 26 September, targeted with assisting up to sixty first-time buyers gain their first step on the Jersey property ladder.

Whilst the detail of how the scheme will run remains to be seen, the David Warr, the Housing Minister, outlined the following key aims:

• £10 million has been set aside to support Islanders with the cost of buying a home
• Eligible purchasers could access up to 40% of the purchase price
• Purchasers will need to contribute a minimum 5% deposit, with the remainder coming from the Government loan and high-street banks/lenders
• Despite being coined a 'shared equity' scheme, buyers will, in fact, own 100% of the equity in their home
• Security for the Government loan will rank as a second charge behind any bank security
• On disposing of the property, sellers will repay the Government loan in the same percentage as borrowed, but calculated on the then market value e.g. if a 40% loan was taken to fund the purchase, the repayment figure would be 40% of the market value of the property on disposal.

Detail as to eligibility for the scheme, time frames for processing applications, the criteria as to how applications will be assessed, what happens in cases of negative equity and how long offers of assistance will remain open for are yet to be published. However, Mr Warr explained that the rationale behind the scheme is to kick-start the property market, particularly at the lower end, which is often the start of a housing chain. We at Mourant have observed that the buoyancy of the market has stalled significantly following the double-whammy of inflation, interest rate rises and stamp duty increases on investment purchases.

It will be interesting to see whether this new scheme generates the anticipated impetus to realise its aim, and in what time-frame.

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