Raising the 10% deposit is holding back property sales

HOMEBUYERS can still get 90% loan-to-value mortgages despite a drop in property prices, two brokers have said.

There had been fears that if property prices in Guernsey fell, mortgage lenders would be less willing to continue such deals.

Pierre Blampied, director at Savills Private Finance, said 90% deals were still available up to £500,000.

'The rates available for this level of loan to value are generally higher, but with Bank of England base rate currently at such a low level these rates are not that high to make it unaffordable to borrowers to purchase property,' he said.

'However, what is holding back the market is the 10% deposit needed and the associated costs such as bond and document fees, which in total amount to a further 4.25%.

'Despite the press releases we are seeing from the high street banks, it is very apparent to the mortgage industry that they are not keen to lend.'

Mr Blampied said the drop in property prices reported by the Policy Council was caused by a lack of sales in the middle to upper end of the market.