Minister urges mortgage lenders to give extra support to homeowners

Tuesday 04 July 2023

A Minister is calling on lenders to provide extra short-term support to residential mortgage holders as interest rates – and repayments – skyrocket.

In a letter signed by Deputy Elaine Millar, Assistant Chief Minister with responsibility for financial services, industry representatives are being asked to confirm they will honour the UK’s Mortgage Charter, published on 26 June.

The charter instructs mortgage lenders to provide tailored support, hold off on repossessions for longer, offer new deals with more advance, and allow customers to plan ahead.

Deputy Millar wrote: "We would welcome confirmation that Jersey lenders, in a similar manner to UK institutions, will also work with any households holding mortgages secured over their primary residence who are struggling with or worried about higher mortgage repayments, and that repossession action will not be commenced, unless all other options have been exhausted."

This means that lenders could extend the term of mortgages to reduce monthly payments or the provision of repayment 'holidays' for short periods to enable affected Islanders time to restructure their finances during such a difficult period.

Pictured: Deputy Elaine Millar has said her government is committed to helping Islanders with the cost of living.

The Bank of England raised interest rates from 4.5% to 5% last month in a bid to stave off stubbornly high inflation.

Deputy Millar said: "The Council of Ministers is closely monitoring the current situation, where we have high inflation and rising interest rates, and we are committed to helping people address the cost of living."

She added that the charter sets out "the standards lenders will adopt when helping their customers."

"Its signatories are committing to providing borrowers with new flexibilities to manage their mortgage payments over a short period, and I have written to lenders asking them for confirmation that they will do the same in Jersey."

The letter follows an agreement made in the cost-of-living ministerial group last week.

Reform Jersey's Deputy Geoff Southern recently called for borrowers to be protected from having their homes repossessed for 12 months after missing a mortgage payment.

His proposals are due to be debated in an upcoming sitting of the the States Assembly on 18 July.