A new generation of astute islanders are finding ways to buy their own homes and benefit from Guernsey’s thriving property sector.

The need to ensure that the first-time-buyer sector of the market continues to do well was highlighted by Swoffers’ local market director Spencer Noyon.

‘Our negotiators have a good deal of experience in advising potential first-time buyers and we felt the time was right to highlight this service on how to reach that important first rung on the property ladder,’ he said.

‘Much is made – and rightly so – of impressive prices achieved and large amounts of activity in the middle and top end of the property market. What we are highly conscious of is the need to ensure that first-time buyers can get onto the ladder. Without them, the whole sector would grind to a halt.

‘More than that, however, is recognition that anyone in our island community should have an opportunity to own their own place. It is almost a basic need in life to know that you have a secure roof over your head.’

He cites several positive reasons for buying rather than renting. ‘People who bought an average-priced property five years ago, when the figure stood at £235,000, are now more than £100,000 better off. The increase in value is £112,000, or 48%’.

With an ongoing shortage of homes here, the market is expected to continue to increase strongly in value.

‘It might suit some people to rent their home but in doing so you are not benefiting from any increase in property value and there is no tax allowance.

‘With a mortgage, owners can claim full tax relief and at the same time the average home is going up in value substantially each month.’

He added that owners also had a sense of independence and the freedom to arrange or improve the property as they wished, which is rarely the case with rented homes.

‘There is a fantastic sense of pride and achievement when you buy your first home. I can still clearly remember it and I think most people do. It is a real landmark moment in life.’

His idea of highlighting ways of getting onto the property ladder originated through awareness that while some younger buyers had received advice and guidance, other hopefuls were not fully aware of the options available to them.

‘A big avenue of support for people in their 20s today is that many of their parents have homes that have soared in value and which were bought for comparatively little. In fact, many have actually paid off their borrowing altogether.

‘That leaves the way clear for them to help their adult children. If a young couple have saved some money and cleared their funding for five-times salary, they still have to find several thousand pounds in legal fees. We have seen instances of parents meeting the legal fee cost because the repayment level for them is very low.’

This situation was confirmed by Pierre Blampied, of Savills Private Finance (Guernsey), which is the island’s largest independent mortgage broker.

‘There are some strong plus points to owning property in Guernsey. The downside is that the lead-in price for a home is high but the sector is very strong and we don’t have concerns as they do in the UK about a possible crash.’

With banks willing to lend five times salary for joint or sole incomes, Pierre helps a healthy number of local people to get onto the property ladder each year.

‘There is no doubt that it is difficult for anyone with an average wage to achieve that first step. There are several ways around that. One is for friends to buy together – and we advise in this type of scenario that a legal agreement be put in place over what to do if one decides to move on or there is a change in circumstances. We would always recommend thinking ahead in that situation.

‘The more usual option today is for parents to help. Any input from them can be secured against the new property. That is especially a good idea if a young couple is buying and one set of parents is helping because, sadly, in today’s world, they might not stay together and the place could be sold a few years down the line. By taking a second bond, behind the bank’s, the parents can ensure that their investment is safe and again we advise clients that advocates should give legal advice in this regard.’
Legal fees on a home of £200,000 amount to £8,500 and it is often this total that couples struggle to save and which parents put forward.

Those who plough in more financial support are advised to ensure that their percentage share of the property is clearly set out and they can then benefit from increases in value.

‘It helps all round because the youngsters get their first home, parents rightly feel that they have been supportive and they benefit from price rises when the first time buyers decide to move to a bigger place a few years down the line.’

* Anyone keen to acquire their first home but uncertain as to how to do so can contact the Swoffers local market team on 711766.

(published in Guernsey Press)