Jersey's house prices dropped 2% in the first quarter of this year, largely due to a big fall in the prices of three bedroom houses.
The mean price of a three bedroom house dropped 7% on the previous quarter and is the lowest price for this type of property since 2007. The number of houses being sold was at a similar level to the quarterly average seen through 2013, although it was up more than 50% on the first quarter of last year.
Jim Coupe, Managing Director of local lenders, Skipton International said, “The main story is in the three-bedroom house market where around 60% of the houses sold were under £440,000. The Deposit Loan Scheme had a small effect with about 17 properties going through, many of which were three bedroom houses, but this was a small factor in bringing down the average price of three bedroom houses in the first quarter. This is good news for home buyers as it means a family home is becoming more affordable in the island and it seems sellers are being more realistic in their pricing."
However, estate agents warned that they are still struggling to get enough properties on their books with some sellers still being unrealistic. Joint President of the Jersey Estate Agents Association, Shelagh Marett, said the recent Deposit Loan Scheme helped the market, and turnover is definitely up on recent years: "It's good that three bedroom property prices have dropped as it stimulates the whole property chain, but I think the Mortgage Market Review will have an impact and might frighten people initially, although obviously it will be for the better as we're not going to get people who will default and lose their properties."
The UK Mortgage Market Review has tightened lending rules in the UK and with many major lenders in the island governed by their UK head offices, it could impact on the local market liquidity or increase application processing times.
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