2020 Budget – what we think

Guernsey’s latest budget proposals are unlikely to have a negative impact on the current high levels of activity in the Local Market.

‘We’ve just had a record third quarter at Swoffers, and there’s every indication these activity levels will continue despite the increases in TRP being proposed in the 2020 budget,’ said Swoffers director, Spencer Noyon.

Domestic and land TRP tariffs are set to increase by 10.2% next year in line with the previously approved States strategy.

The States will also consider options to further increase domestic TRP on larger properties or commercial premises, or a combination of both.

‘Whilst the increase in TRP may impact some households, particularly perhaps older people who live alone in a large family property, in general terms I don’t think the increase is going to put people off buying their dream house,’ said Spencer.

‘An interesting recommendation in this year’s budget is the introduction of equity release mortgages. This is when a homeowner can access the equity tied up in their home whilst retaining ownership by borrowing against the security of their property. The loan amount and interest accrued are paid back when the property is sold, when the homeowner dies or moves into long-term care. The introduction of this sort of mortgage product in Guernsey requires a change in the law and also sufficient safeguards in place which may take some time to implement. Interest rates are also bound to be much higher for this sort of borrowing.’

Swoffers’ partner mortgage broker, SPF Private Clients, has also welcomed the move and suggests that people interested in an equity release mortgage are likely to be older borrowers who are asset rich and cash poor.

‘Anything that provides Guernsey people with another way to stay in their homes and be better off in their later years, should certainly be considered,’ said Pierre Blampied, managing director, SPF.

‘However, this type of product is highly regulated in the UK, and a key factor is ensuring that borrowers fully understand the impact of ‘roll up’ interest. It is good to see the regulation aspect being referred to in the budget.’

Spencer added: ‘In general terms I don’t think those looking to buy or sell their homes have much to worry about in next year’s budget. The market continues to perform well, especially at the first time buyer to mid-range property level. It’s a great time to think about a move so why not contact us to discuss your requirements.’


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