The investigation was initiated after numerous Islanders and the property conveyancing sector requested greater transparency in mortgage rates. The JCC addressed an open letter to six major mortgage lenders in Jersey: Royal Bank of Scotland International, Barclays, Skipton, Santander, HSBC, and Lloyds.
JCC’s investigation revealed consumer confusion over the disparity in rates, particularly since property prices in Jersey are already higher than in many parts of the UK. The report noted that borrowers could pay up to £20,000 more per £100,000 loan over a 25-year mortgage compared to the UK.
Banks attributed the difference to their status as ring-fenced, separate entities from their UK counterparts. Despite this separation, these banks align with their UK brands in terms of marketing, contact details, and mortgage products, which often track the Bank of England’s base rate and fluctuate with its interest rates.
JCC concluded that higher mortgage rates are also influenced by the elevated savings rates in Jersey, designed to attract both local and inward investment.
The council said its findings highlight the need for the banking industry to enhance transparency. They also urged the Jersey government to reassess the balance between attracting inward investment and ensuring affordable home ownership for Islanders.