Reform: Gov 'dithering' means £10m housing scheme will help fewer people

Tuesday 26 September 2023

Government "dithering" has meant the newly announced first-time buyer scheme will help fewer people than it could have done, according to Reform Jersey – who also claim the scheme is "almost identical" to one they proposed a year ago.

Today, Housing Minister David Warr revealed details of how £10m of funding set aside in a previous Government Plan will be used to support first-time-buyers.

Deputy Warr has announced that States-owned affordable housing provider Andium Homes will manage a new 'First Step' scheme, which would enable eligible islanders to access a Government contribution of up to 40% towards the purchase of an open-market property.

The product is limited to first-time buyers, who will also need to provide a 5% deposit towards their purchase.

However, Reform Jersey issued a statement criticising the scheme as "almost identical to the one proposed by [the political party] one year ago, which was opposed by the Government".

Reform Jersey also described the Government’s approach to the housing crisis as "one of complacency", adding that "this indulgence is not one the people of Jersey can afford".

Pictured: Deputy Sam Mézec, leader of Reform Jersey.

A statement from the political party said: "Last year, Deputy Mézec proposed in the States Assembly that this [£10m] fund be used to establish a shared equity scheme through Andium Homes to help private renters buy homes in the private sector.

"Andium would have then recycled the funds as homes are eventually sold by their first purchasers, using the uplift to help more people buy their first homes as time goes by."

"In the year since the Government rejected Reform Jersey’s proposal, the [Housing] Minister has dithered, only to end up arriving at the same conclusion.

"This has meant the scheme will be in place a year later than it could have been and, because of rising housing costs, will help fewer people in the short term."

I’m very pleased for the government to pinch Reform Jersey’s policies (genuinely, please, take the lot), but if they could do so at least in a timely way, we could save the public a lot of hassle and ultimately get better value for money. https://t.co/K4OHrI9GYf

— Deputy Sam Mézec (@SamMezecJsy) September 26, 2023

The critcism comes not long after estate agents warned that housing market transactions had "fallen off a cliff" and urged vendors to be "realistic" about their asking prices.

Jersey’s latest House Price Index showed that the average cost of a home during the spring was £666,000 – down £20,000 against the same period in 2022.

The number of sales was also down 42% on the same quarter of last year.

However, Deputy Warr expressed optimism in the scheme and said he hoped it would create "a ripple effect that I believe will get the housing market moving again".

His department has estimated that up to 60 households will be able to benefit from the initial £10m investment, which the Government has said it will consider extending should it "prove successful".

Pictured: Housing Minister David Warr announced a new shared-equity scheme today.

The £10m was previously earmarked in the 2021 Government Plan – when John Le Fondré’s Government was in power – and was also referenced within a housing action document produced by Deputy Warr’s predecessor, Russell Labey.

Mr Labey’s plan recommended that the funding could be used to maintain or alter "a single existing affordable ownership product".

Deputy Warr stressed that First Step was different to Andium Homebuy, the affordable-housing provider’s existing shared-equity scheme, where first-time buyers can purchase a home utilising a deferred payment of up to 25% of the market value.

A new £10 million shared equity scheme to help Jersey’s first-time buyers into home ownership has been announced by the Minister for Housing and Communities, Deputy David Warr @warronwords

Find out more at https://t.co/7NyWzaG3Sa pic.twitter.com/8diCYpGE9v

— Government of Jersey (@GovJersey) September 26, 2023

"It’s not Andium properties. We’re looking at open-market properties," Deputy Warr explained.

"The second area [of difference] is that we don’t want new developments. We’re not looking at helping people to buy a brand-new build. We’re looking at buildings that already exist and have maybe housed other people in the past," he added.

"The idea is to keep recycling that money around. One of the objectives of shared equity against, say, a loan deposit scheme, is that we take away a bit of the borrowing from the individual on their home.

"Obviously with a loan deposit they have to pay back that loan, as it were. Whereas in a shared-equity scheme, that borrowing, that element that the Government has provided, doesn’t become real until the individual sells their home," he continued.

"We would get, as a Government, the uplift in the value. So in other words, if we’ve put in £100,000 and there’s been an improvement in price – and it comes back at £150,000 – that comes back into Government. So that money would then be recycled."

Andium Homes spokesperson Carl Mavity said the provider was "delighted" to be working with the Government on the initiative, "which will operate alongside our existing Andium Homebuy shared-equity scheme".

Pictured: Andium spokesperson Carl Mavity.

The Government has said that details on how the funds will be prioritised and allocated – including limits on the costs of properties available through the scheme – will be "further refined over the next few months".

Islanders who want to be put forward for the scheme are being invited to register their details and interest on the Assisted Purchase Pathway waiting list, which can be found online.

Those already registered are being encouraged to contact Andium and ensure their details are up to date.

The current household income limits for those applying for support from assisted home purchase schemes can be found below: