Return of 100% mortgage to Guernsey market is a positive move for first time buyers

Tuesday March 13, 2018

The launch of Skipton’s offering termed, ‘The Next Generation’ mortgage has been welcomed by Paul Welch, CEO and founder of The mortgage is aimed at young people trying to get a foot on the property ladder and will allow 100% of the value of a property to be borrowed, on the proviso that parents guarantee 15% of the purchase price of the property to a maximum of £500,000.

Guernsey born and bred entrepreneur Welch believes anything which helps young people get onto the property ladder should be welcomed with open arms, “Guernsey’s housing market makes it nigh on impossible for many to even dream of home ownership. Last year’s KPMG Guernsey Housing Market Review showed that the island’s mean income is £33,000, whist the mean house price is £400,000. Skipton’s new offering will give first time buyers the option to break free from the cycle of renting and realise their dreams of home ownership. This can only be a good thing for those individuals and the wider housing market and economy.

Skipton’s offering relies on security from the so-called ‘Bank of Mum and Dad’ – a similar approach to that offered by the Family Building Society, a lender introduced to the island by Welch in 2017.  By looking at the finances of the family as a whole, ‘The Family Mortgage’ can unlock money to help future generations without compromising the security of parents in their retirement. Under the Family Building Society’s offering, first time buyers can borrow up to 95% of the purchase price with additional security.

Welch says, “Different lenders have different criteria and, for some, 100% lending isn’t appropriate. It’s vital to look at the long-term. Both the Family Building Society and Skipton’s products are designed for home owners, not speculators. Loans against a primary residence are a very different matter. Checks and balances will be carried out by a broker or directly by the lender to ensure responsible lending.” handles more than £3 billion of enquiries every year through staff in London, Singapore and Monaco.  As well as bringing its core offering to Guernsey, it is driving reforms in the local lending market to offer consumers more borrowing options, better suited to their life stages. Welch says there’s still so more which can be done to help first time buyers, “Every home below the average house price of £400,000 should be exempt from document duty and bond fees. Furthermore, bonds held by existing mortgage holders should be transferrable for a flat fee of £1,000. This will allow mortgage prisoners trapped on high standard variable rates to move their mortgages elsewhere. Lenders could then price to attract business, and homeowners could truly get a better deal.”

Skipton’s new product is certainly welcomed by Welch, “I applaud Skipton for introducing this offering. Doing nothing is not an option. If we don’t act now, we risk losing the skills and expertise of a whole generation of islanders.”



Notes for Editors

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Founded by Paul Welch in 2006, is a market leader in the UK mortgage industry and the UK’s first mortgage broker to specialise in arranging mortgages above £500,000. It is at the forefront of the industry as a result of providing innovative funding solutions, million plus mortgage advice and access to sources of capital not generally available.

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