Big plans ahead to double mortgage lending in 2022

Edward Jones, Butterfield’s head of lending for the Channel Islands, said the bank had provided 36 mortgages in Guernsey since June, with a similar number in Jersey in that time.

‘We’ve got a very strong pipeline as well behind that. We’ve outstripped our budgets and we have been getting an awful lot of very positive feedback from our client base in terms of our deliverance proposition,’ said Mr Jones.

‘We’re looking to get account-opening facility letters out within a one-week period, looking to be that reliable mortgage provider.’

With the mortgage service being Butterfield’s first real step into the retail market, Mr Jones said that the bank spent a year before that planning and ensuring proper processes were in place and working with staff to deliver for customers.

‘We started with a slightly higher threshold of income levels and we’ve now opened that up to the broader retail space,’ he said.

‘We’ve put a maximum loan to value at 80%, which we think is a realistic and reasonable request in the local market. We feel that higher loan to values would potentially be an unnecessary risk for us to take. And we see that in the research we’ve done – the absolute majority of transactions going through the market fall well underneath that level.’

Asked if the property market would continue to go up, Mr Jones said a survey commissioned by Butterfield found that in Guernsey 74% of respondents believed that house prices would continue to increase over the next five years.

‘That tends to be the market observation. Obviously from a lender perspective, and going back to the point of us being a responsible lender towards the island and the community which we very much appreciate and want to be part of, we’re cautious. We put parameters in and hence why we have that reasonable loan to value ratio that we’re looking to provide.

‘We’re not pushing and stretching and getting people into debt. This is being a consistent and reliable lender to the market that we’re interested in.’

Issues relating to housing stock would be a challenge, he added, but activity was expected to continue into next year.

‘People are buying and selling still. People still need to upgrade their housing – and it’s just making sure you get the right price for yourself and the right price for your purchase. But there are also refinance opportunities there as well as people extend their mortgages and continue to undertake the lifecycle of a facility.

‘Ideally we are looking to possibly double what we’re doing this year, so both Guernsey and Jersey, we’ve done the combination of about 60 mortgages and we’re looking to do twice that going into next year.’