Philip Syvret recently made submissions to the States of Jersey Scrutiny Panel who were considering the proposed Starter Home Deposit Loan Scheme. The Scrutiny Panel, was investigating whether the States Loan Scheme for Housing established under the Building Loans (Jersey) Law 1950 could be revitalised to assist in the present Housing market. The Dwelling Houses Loan fund established under the 1950 Law had been largely inactive in recent years as private financing had become more readily available. The present downturn in lending from banks had lead to possible changes in the scheme being promoted.
Philip Syvret submitted to the Scrutiny Panel that overall the principle of the Scheme appeared to be an appropriate development of the principles established in the Building Loans (Jersey) Law 1950 taking into account the materially changed economic circumstances existing at the beginning of the 21st Century.
He went on however to express concern at the levels at which the proposed assistance under the Scheme would be provided. Those views were backed by Peter Seymour of the Mortgage Shop who also made submissions to the Panel confirming that there would be little difference between a buyer’s cost with 95% mortgage and the costs of an 80% mortgage with a 15% loan derived from the Building Loan Scheme. In particular the Scrutiny Report cited Mr Syvret’s submission that he had:-
“Also considered the financial eligibility set out in the report attached to the proposition. Whilst that criteria seems restrictive it is appropriate for that to be adopted during the first six month trial period. Proper assessment can then be made as to whether an extension or alteration should be made.”
Equally the report cited Benest & Syvret’s view that:-
“Ultimately in order to have significant impact on the affordability of housing in Jersey a wider approach will need to be taken to ensure the availability of land for the development of affordable homes”.
Finally the report also cited Philip Syvret’s submission in respect of default arrangements. Philip Syvret said:-
“In our experience commercial lenders are reluctant to agree a second charge as a second charge holder in the peculiar system of Jersey foreclosure (known as dégrèvement) has the opportunity of taking relative control of the property during the foreclosure process”.
In response to the report of the Scrutiny Committee Philip Syvret said:-
“We were pleased to be involved in making submissions to the Panel. We note that the recent UK budget has made similar proposals for a deposit loan scheme and we would encourage the States to advance the scheme. House prices for starter homes seem to have stabilised at a new level and it remains difficult for first time buyers to raise the levels of deposit now required by commercial lenders. If the States can lend support to first time buyers with a scheme with appropriate financial parameters that can only be of assistance”.
Philip Syvret is a Partner in Benest & Syvret and one of the Island’s leading property lawyers having over 20 years experience in the conveyancing and property development market. Philip Syvret is available for interview and can be contacted on 706670 or Philip.firstname.lastname@example.org.