JERSEY PROPERTY MOVES FORWARD


Noel explains how a wider range of mortgage lenders on the island helps create more choice for borrowers.


by Noel McLaughlin, Managing Director, Butterfield Bank (Jersey) Limited


For businesses operating in the housing market in Jersey, the big question in the early part of 2020 was exactly how the COVID-19 pandemic would affect property prices and sales. Thankfully, it appears that the market on the island stood up exceptionally well.


F


igures from Statistics Jersey show that the average price of a Jersey property at the end of September 2020 was £533,000, a 3% increase on the same point in 2019. While the number of transactions understandably fell during lockdown in March through June last year, the market seemed to enjoy a significant bounce back, with the number of properties sold in Q3 2020 at 117% higher than in Q2, according to government figures. Statistics Jersey House Price Index Q3, 2020


This certainly seems to point to the robustness of the island’s property market even against a backdrop of general uncertainty. Indeed, the sentiment among some estate agents at the start of 2021 is almost bullish.


For people looking to buy a new home or remortgage during 2020, a prime concern was how the pandemic might impact mortgage rates and availability. Perhaps unsurprisingly, mortgage providers have had to make adjustments to the products they offer, and some mortgages were removed, while the maximum loan-to-value (LTV) in some instances decreased. www.skiptoninternational.com/covid-19


Mortgage payment holidays were also offered by many providers to assist those who struggled with their finances during the pandemic. This is something that happened on a global basis. Butterfield in Bermuda and the Cayman Islands, for example, made payment deferrals on mortgages to those in need.


Opening up the market Owing to Jersey’s size, the mortgage market in the island has,


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historically, been relatively small. Some providers have come and gone, product ranges and pricing can fluctuate, and many of the recognisable names are local offshoots of the big UK banks. This landscape has naturally limited the options available to people looking to obtain a mortgage.


It’s Butterfield’s view that it is beneficial to the borrower when there are more players in the mortgage market. This is because increased choice means that prices can be more competitive and the quality of the service has to be higher. With the launch of Butterfield’s new mortgage service in Jersey in 2021, we aim to increase choice and open up some of those associated benefits.


With 2020 being a year that most of us will be happy to put behind us, we feel the time is right to launch this new service, and to provide some optimism to borrowers following such challenging times. Indeed, this is something that has actually been in the pipeline for a number of years. Butterfield already has significant lending in Bermuda, Cayman and prime


central London, and this is very much a natural extension of our business.


It’s also a further commitment to Jersey (and Guernsey). With the local acquisition of Deutsche Bank and ABN AMRO Channel Islands in recent years, Butterfield has demonstrated the strategic importance of the Channel Islands for the Group and we’re keen to develop that further through mortgage lending.


As a matter of fact, we tested the Jersey market during 2020,


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