Smaller mortgages force Islanders to take more steps on the housing ladder

Tuesday 26 May 2015

Banks and mortgage lenders tightening up the amounts they are lending to househunters seems to be pushing people into taking more steps on their way up the property ladder.

The Head of Conveyancing at Collas Crill, Shaun O’Connor, says that with less on offer from lenders, buyers seem to be making more, smaller moves from property to property as they climb the ladder, instead of making fewer, bigger jumps.

His comments follow the most recent House Price Survey, which seemed to show after signs that the five-year property price slump was over, property prices had seen a 1% drop over the start of the year.

Mr O’Connor said: “Despite the drop of 1% shown in the latest quarterly Jersey House Price Index, the trend shows that taking into account the stamp duty rise and the smaller number of court sittings, more properties are currently being bought and sold.

“The developments that we are currently seeing mark a return to a more traditional housing market. Instead of buying and selling property as a fast way to make money, or immediately moving into a three bed family home, first time buyers are starting off in a smaller property and buying and selling in an upward cycle over a longer period of time - moving up to a two bedroom, then into their first three bed family home, then eventually buying a bigger family home to reach their ‘dream house’.

“While the generous bank lending days of the past encouraged people to make less, bigger moves over a shorter period of time, we are noticing that more regular, smaller moves are becoming the norm, encouraging more movement in the market generally.”

The most recent House Price figures for January to March show that:

One-bedroom flats had dropped £16,000 to £201,000.

Two-bedroom flats had dropped £6,000 to £335,000.

Three-bedroom houses had dropped £2,000 to £524,000.

Four-bedroom houses had dropped £5,000 to £707,000.