Paul Scally, a partner at law firm Le Gallais and Luce, has said that the combination of ‘good mortgage rates, better property stock and more market confidence’ have created positive conditions for Jersey homebuyers and he believes ‘now is the right time to buy’.
Mr Scally, who specialises in property conveyance, was speaking in response to comments in the JEP this week from Peter Seymour, managing director of the Mortgage Shop, who said that the ‘sweet’ period was over for buying property in the Island, as economists have warned that borrowing costs will rise early in 2016.
‘There is more to the property market than a low base rate. Trying to suggest when is a “good time” to buy property based on one element alone is misguided,’ said Mr Scally.
‘The property market in Jersey boomed in the late 1990s and 2000s when the base rate was usually around four per cent to seven per cent, and throughout most of the 80s and early 90s the rate was often in excess of ten per cent.
‘Even if the base rate was to rise to 1.75 per cent that would still be lower than the rate in December 2008 when it was three per cent.’
Mr Scally went on to say that the other factors involved in getting a mortgage had created a good market for homebuyers.
He said: ‘Many banks are offering all sorts of incentives to potential borrowers to assist them and there is also a growing market for private lending.
‘It’s my belief that’s its never been a better time to borrow in terms of the variety of lending available.’
He also said that he felt confidence had returned to the property market in Jersey after it had been ‘dented’ by the global recession in 2008.
‘Our housing market at the moment is steady in terms of volume and value – that’s exactly what an island like Jersey needs and wants.’
He added that the predicted rise in the base rate would not happen until at least next year and nothing was ‘concrete’ as yet.
Jersey property expert Gavin Renault examines the advantages and disadvantages of share transfer and flying freehold transactions. Prior to 1983, the majority of sales and purchases of freehold stand alone properties were completed by way of a contract passed before the Royal Court.
Share transfer
A block of apartments has to be owned by a holding company. Each holding company needs tailored articles of association (the Articles) specific to their requirements. Blocks of shares in the holding company attach themselves to each unit within the block of apartments belonging to the holding company.
Purchasers buy a block of shares in the holding company which entitles them to the exclusive occupation of the allocated unit. These rights are similar to freehold ownership, but are limited by the rules and regulations contained in the Articles. Completion is usually achieved by the execution of a share vending agreement, the issue of a new share certificate and the entry of the purchasers’ name into the register of members, and can take place on any day of the week.
Flying freehold
The Flying Freehold Law was introduced for the purpose of enabling co-ownership of buildings which are to be divided into separate dwellings, enabling apartments to be sold on a freehold basis as opposed to share transfer. It also became possible to mortgage flying freehold apartments in a similar way to stand alone freehold properties. In essence, the legislation allows outright freehold ownership but, again, these rights are limited by the rules and regulations contained in the declaration of co-ownership (the Declaration) of an Association. The Association is the body which notionally becomes the owner of the whole of the property.
