The housing market has been anything but stable over the past year or two. With fluctuating property prices, unpredictable interest rates, and varying market conditions, it's easy to feel lost in the chaos. To gain insights into the current market, as well as some clarity on what the future may hold, we decided to turn to an expert in the field - Emily Knight, Mortgage and Life Insurance Advisor, from Cherry Godfrey’s Guernsey office.
What types of mortgages can you advise or broker on?
We can help with Residential and Buy-to-Let Mortgages for First Time Buyers, Re-mortgages, Home Movers, and further advances for Home Improvers. We’re in the privileged position of having access to all high street lenders and some specialist lenders and private banks across the island.
What kind of changes has the market been through in the past two years?
We’ve seen huge changes in interest rates, lender appetite and stress testing. Some lenders who were previously competitive on borrowing amount and rates have pulled back and others have overtaken, which has made it a bit difficult for individuals because some lenders have been changing their criteria so frequently.
How have these changes specifically affected Guernsey?
Island interest rates don’t follow the UK trends as quickly or as closely and there is less competition between lenders. The cost of living is so high in general, so increased mortgage payments are going to be very difficult for those coming to the end of a fixed rate, and for First Time Buyers struggling to save for their first home.
Anything we should be keeping an eye out for over the coming months?
There has already been a slight drop in house prices, and it looks like this will continue whilst rates are high. If mortgage interest rates do slowly start to drop, we may hopefully see that lender appetites increase, and affordability criteria will become less rigid. Also, some good news for First Time Buyers in Jersey could be on the horizon: they are potentially introducing a higher purchase limit for document/ stamp duty. It’s well worth keeping an eye out for developments here!
What's the timeline for completion?
It depends on the circumstances, but it is usually eight weeks for simple cases and can be between two and four months if it’s more complex, or the vendor is not in a rush. It also depends on whether there is a chain, or if there is any hold up at valuation stage.
Any thoughts on mortgage Insurance?
It’s very beneficial to have Life Insurance to protect your mortgage.
It's also a common misconception that life insurance is simply a way to protect your mortgage, it can also clear other debts after you're gone, easing the financial load on your family. There is also additional cover such as income protection - to protect your income if you were unable to work, or Critical Illnesses Cover, to provide financial security if you were to be diagnosed with a critical illness.
Any particular advice for First Time Buyers?
For First Time Buyers, I suggest that you start regularly saving so you can be comfortable that your new mortgage repayments will be sustainable. There are some specialist products for First Time Buyers. Skipton offer a next generation, 100% mortgage and HSBC offer 95% loan to value mortgage. In addition, some lenders are currently offering fee free products and others are offering free valuations for certain loan to values. We can also look at options early for peace of mind and to give information on how to be prepared for a first purchase in three, six or twelve months.
It's important to note that each island's market has its unique characteristics, so Emily's perspective will offer valuable insights for those in the Guernsey region. However, whether you're a first-time buyer, someone looking to re-mortgage, or nearing the end of your fixed-term agreement, we aim to provide practical advice and information tailored to your specific circumstances. Please get in contact today to find out more.
