A GLIMMER of hope could be on the horizon for first-time buyers, with local mortgage lenders expected to ‘follow their UK counterparts’ in lowering their rates.
Housing Minister David Warr has urged providers to drop their rates after Halifax joined NatWest, First Direct and a stream of other major British lenders in announcing reductions on some of its products.
Halifax said it was reducing five-year fixed-rate mortgages by up to 0.71 percentage points, while two-year fixed-rate loans would fall by up to 0.27 percentage points.
Peter Seymour, of The Mortgage Shop, said: ‘We anticipate seeing reductions from all lenders, [perhaps] slightly less than in the UK.’
He explained that this was partially due to lenders needing to remain competitive in the wake of market transactions slowing.
‘We are aware of one or two lenders in the Island who have done very little business this year,’ he added.
Statistics Jersey’s next House Price Index report is due to be released on Thursday.
‘It is going to be interesting to see the figures,’ Mr Seymour said, stating that a drop in housing costs should eventually be reflected in the quarterly report.
Commenting on Halifax’s announcement, Deputy Warr said: ‘I would certainly urge lenders to follow their UK counterparts. I would love to see it happen. Although I am very aware of the competitive pressures in the UK, what we see there is often reflected here, so one would hope that rates will come down.’
Skipton International’s mortgage sales manager Lorraine McLean said the company had recently reduced – for Jersey residential mortgages – its entire product range by 0.3%.
‘We can only see this as positive news for the local market and a move which will give more confidence to home-movers and first-time buyers,’ she said.
She added that the company wanted ‘to be able to offer as competitive a priced product as we possibly can to local purchasers’, although she did acknowledge that housing market transaction numbers had ‘dropped off’.
She said that other lenders ‘may follow suit’ but that she did not expect the reductions to be ‘dramatic’.
