Help sought for islanders struggling with mortgage repayments

Wednesday 28 June 2023

Islanders could be protected from having their homes repossessed for 12 months after missing a mortgage payment, if politicians back a Reform Deputy's plan.

Deputy Geoff Southern is calling for Chief Minister Kristina Moore - in consultation with Treasury Minister Ian Gorst - to engage with local mortgage and credit providers to support consumers who are struggling to make repayments.

Deputy Southern said this should be done with a view to allowing borrowers to reduce their monthly repayments – by extending their term or switching to interest-only repayments - and ensuring homes will not be repossessed until 12 months after a borrower misses a mortgage payment.

"In the UK, there are some 2.4m fixed-rate homeowner mortgage deals due to expire by the end of 2024 and with average two-year deals now above 6% many could see their interest rate triple over the coming months," he wrote in a report explaining his proposal.

Pictured: Deputy Geoff Southern is calling for the Government to "mitigate the short-term local hardship" caused by Bank of England base rate hikes.

He continued: "Analysis by the Public First consultancy found that the impact of mortgages could be far in excess of the surge in energy bills for certain households. Those with typical-sized mortgages in London and the home counties, could easily see their mortgage rise by £5,000 or more per year compared to 2020-2021 when many will have last fixed their rate.

"These sorts of figures will clearly apply to house prices in Jersey and will be most marked amongst those under the age of 45 whose interest payments are a higher proportion of their mortgage, and indeed of their living expenses.

"Whilst the Government can do nothing about the Bank of England’s base rate, it can and should do what it can to mitigate the short-term local hardship that may ensue."

The proposition is currently due to be debated at the States Assembly's upcoming meeting on 18 July.