TAXPAYERS will probably have to increase their stake in shared-equity schemes to help first-time buyers to get on the property ladder, according to the politician in charge of planning policy.
Environment Minister Steve Luce said that with developers facing an “astronomical” rise in raw materials and the high cost of developable land in Jersey, he could see a time soon when the Government provided half of the equity in a property purchase for eligible Islanders.
Last year, Housing Minister Sam Mézec launched the First Steps scheme, which provides up to 40 per cent towards the purchase of an open-market property, drawing on a £10m pot of money.
So far, more than 50 homes have been purchased and an application window for a fourth tranche of funding has recently closed.
The States must not be surprised if they are asked to have an increasingly large chunk of the equity
Environment minister Steve Luce
However, Deputy Luce said more public money was likely to be needed.
Speaking to Scrutiny this week, he said: “It seems clear to me that if we are going to continue to build affordable homes, the Government is going to have to continue to help with shared equity. We need to be prepared for that equity figure to be quite high.
“I don’t think we should be surprised if we find ourselves in a 50/50 situation soon.
“In some ways, that is good for government, in they will invest in a home and they have an asset on the books.
“But it does mean that government will have to come up with a considerable amount of cash in order to fund that 50 per cent because any developer is going to need to be paid for the very bare minimum: the building costs and the cost of acquiring the site.
“The net cost of building a home is not inconsiderable.”
He added: “It must be clear to anyone that the more you pay for land the more effect it has on the viability of the project. The cost of these projects per house is to the point where the States must not be surprised if they are asked to have an increasingly large chunk of the equity, if we’re going to have a shared-equity scheme.”
However, speaking to the JEP, Housing Minister Sam Mézec said that any percentage in a shared equity scheme would be determined by data.
He said: The Environment Minister hasn’t discussed that with me yet but I would say that any decision has to be based on the affordability at the time.
“When we launched the First Step scheme, we looked at average house prices, earnings and other figures, which pointed to the Government providing up to 40 per cent of equity.
“I would certainly support 50 per cent if that’s what the data said but, equally, it could be 30 per cent.”
As well as the First Step scheme, taxpayer-owned Andium Homes runs its own version, which allows eligible first-time buyers to pay 75 per cent of the market value with no deposit. Jersey Development Company and some parishes also run their own schemes.
Pictured top: Some of Le Grand Clos in Trinity was a parish-led shared equity scheme
