A QUARTER of all Islanders with a mortgage face an uncertain future following the announcement that a leading lender is all but shutting up shop.
Jersey Home Loans, which has a lending book worth an estimated £1 billion, has revealed that it is no longer offering any new loans in the Island. The hardest hit in the immediate term will be those who have been offered mortgages by Jersey Home Loans, but who are likely to have that offer withdrawn – possibly leaving their dreams of a home in tatters.
And those who already have mortgages may be left with little choice but to foot the considerable cost of swapping lenders because Jersey Home Loans are now only offering uncompetitive rates. Under Island law, lenders must honour their contracts with borrowers, so that if Islanders have signed for a 25-year term, for example, the lender must not renege on that agreement.
Jersey Home Loans’ parent building society, Kent Reliance, said they had taken the decision to close the doors to new customers partly because of the effects of the credit crunch. However, they also blame the States for not allowing Jersey residents to use their savings products. Deposit-taking licences are granted only to the world’s top 500 banks.
