First-time buyers face more hardship

FIRST-TIME buyers may find it even harder to get a mortgage in the coming months, lenders have warned.

Prospective purchasers have seen 95% and 100% mortgages disappear during the past year and the 90% deal could follow.

One mortgage broker said it would be 'disastrous' for the housing market if the 90% loan-to-value mortgage was also withdrawn.

Nigel Pascoe, director of lending for Skipton Guernsey, said whether that happended all depended on whether the value of island property fell.

'If the 90% loan-to-value mortgage is to be retained, it is important for property values to hold up,' he said.

'In the current economic situation, there is no guarantee that the 90% LTV mortgage will still be available in the future. If the last quarter, where the average house price fell, was a blip, then there is a stronger argument to maintain the 90% LTV.'

Caroline Hards, mortgage manager at Cherry Godfrey, said: 'It's going to improve. I think everyone is worried at the moment but when there has been recession before, it has settled.

'I don't think it will go back to over-the-top lending, because no one wants that to happen again, but it will ease up. It may get a little bit worse, in terms of the mortgages you can get, before it gets better.'

Currently, first-time buyers are faced with the daunting prospect of needing savings to cover at least 10% of their chosen property's value, plus fees. That means young islanders looking to buy a £300,000 house need roughly £43,000 to cover deposit and fees.

• There is a four page in-depth look at Guernsey's housing market in today's Guernsey Press.