Jersey House Prices & Jersey Home Loans - 2009

So the Jersey Evening Post splashes out this evening that there has been a reduction in prices and transactional levels have crashed.

All this happened in the last quarter. They are very behind the times with their news although I do them a slight disservice in that they published an article in November. This blog has referred the dire state of the local market since the 24th July 2008 here.

Strangely enough the market is showing signs of action, not from the first time buyer, but more from those who are looking to invest funds in rentals because of the paucity of the return on money in the Bank.

There is of course a different mindset from the Banks but it is no different from 15 years ago when most purchasers had to have a deposit and an 85% to 90% mortgage was the norm - with 3.5 times salary being the max sometimes stretched to 5 times.

Yes, some house prices will still have to come down, there has to be value for money to create a market, and maybe there will be some fallout from those who had 100% mortgages with lower prices.

I wonder whether the downturn will be as bad as predicted given that the press and statistics are always about six months behind events at the coalface - today's redundancies are a result of a lack of activity a year to six months ago.

Also in the JEP tonight was talk of an action group in respect of Jersey Home Loans. Perhaps the borrowers should look to refinance elsewhere rather than pay JHL's rates. Of course, if JHL do re-enter the Jersey market, the Jersey customer now knows how they are treated when the chips are down, so, in time honoured fashion there will be no need to use JHL because whether they offer the best rates in the future it is probably better to pay a little more rather than being screwed by JHL when the chips are down. Of course if they are allowed to take deposits, who on earth would bank with them if they can't be trusted with their mortgage rates.