New home ownership scheme helps Jersey residents get on the housing ladder

A new assisted home ownership scheme, First Step, is being piloted by the Jersey government and Andium Homes, Jersey's largest provider of affordable housing, as of February 2024 with the aim of helping locally qualified people to buy their first home.

Funding

Andium have been allocated an initial pot by the government to fund First Step, under which it will provide an interest free loan (Equity Loan) of between 10 and 40 per cent of the market value of the property, secured as a second charge behind the mortgage.

Funding will be released in three tranches of approximately £3 million over the course of this year. Applications must be submitted separately for each tranche, with applications for Tranche 1 needing to be made before 2 April 2024. Tranche 2 is expected to launch in June 2024, and Tranche 3 is expected to launch in September 2024.

Interest instalments will not be payable on the Equity Loan. Instead, repayment will be due on certain trigger events (such as the sale of the property) at which time Andium will be entitled to receive a share of the market value of the property.

Who is eligible for First Step?

In order to qualify for the scheme, successful applicants must:

• Pay a five per cent deposit
• Raise a capital repayment mortgage for the balance
• Contribute any savings and investments they may have in excess of £15,000

Additional requirements are that applicants must:

• Be at least 18 years of age
• Have ‘Entitled’ residential status
• Be domiciled or ordinarily resident in Jersey at the time of application
• Not own, or have previously owned, property in Jersey or elsewhere in the world
• Satisfy the household income, deposit, and savings requirements under the policy terms
• Occupy the property as their principal place of residence and sign a declaration in this regard  

An assessment will be made by Andium to determine whether an applicant has a genuine need for support and is able to meet certain costs, including stamp duty, survey, and legal fees.

Eligible properties can be freehold, flying freehold and share transfer but cannot be new builds, or conversions, or available through the Andium Homebuy scheme. 

Conclusion

We think that First Step will be a great help to first-time buyers who are unable to fund both a deposit and a full mortgage. There is however a limited pot and tight criteria, so not all who apply will be successful.

We also expect to see a knock-on effect through First Step purchases helping to free up chains and stimulating the property market overall. In what has been a difficult period for the housing and property industry, this can only be seen as a positive 'step' in the right direction!