Related Case Studies
14th February 2023Fast Bridging Loan For A Jersey National & Swiss Resident
19th December 2022Complex, Interest-Only Jersey Mortgage
Location: Jersey, CI
Enness works with local and international lenders to negotiate a comprehensive range of Jersey property finance.
Enness sources and negotiates:
Enness is authorised to operate in Jersey by Jersey’s regulator, the JFSCRequest A Callback
Not everyone is eligible to buy property in Jersey, and you must understand whether or not you are entitled to purchase real estate before you start looking at properties.
When it comes to property purchases and mortgages in Jersey, Jersey’s legal system essentially prioritises those born in Jersey or those who have lived in Jersey for ten years or more. Given there is significantly more demand for residential properties than supply (and reflecting that Jersey has seen an influx of residents from abroad in the past few decades), the system ensures that locals can retain access to residential property, and they aren’t priced out of the market.
For those with "residential" status (usually those born on Jersey or who have lived on the island for many years), there is no restriction on buying, selling or owning a residential property that you will let out.
If you fall into the "licensed" category, you may be eligible to buy Jersey property. You can buy a primary residence, although you will only be able to purchase specific property types (you would not be able to buy a home set aside for first-time buyers, for example.) You should also note that if you were to lose your licensed status before you have lived for ten consecutive years in Jersey, you may be required to sell your property if you cannot find another role on the island that would also grant you licensed status within three months
If you have "entitled to work" status, generally, you will not be able to purchase property or get a mortgage in Jersey, except in scenarios when you buy a home with a spouse who has "residential" status. Anyone with "residence" status cannot buy Jersey property, although you can rent a property, as can those with "entitled to work" status.
Jersey also offers a pathway for wealthy individuals to purchase Jersey property through its High Value Residency scheme.
In addition to the more standard eligibility statuses, Jersey also proposes a High Value Residency scheme for high-net-worth (HNW) individuals looking to buy property or get a Jersey mortgage. Jersey grants only a few High Value Residency statuses to HNWI each year.
The scheme is designed to offer a route to residency for HNWI who will bring a tangible social or economic value to the island through their residency on Jersey. HNWI with the following characteristics can be ideal for the scheme, provided you also meet the additional criteria:
You are still active in their business or investment activities and continue to generate wealth
You can create jobs on the island through investments or projects
To meet the conditions for High-Value Residency, you will also need to:
Have annual income of more than £725,000. You will need to be able to prove that this income is stable and will either remain the same or increase throughout your residency
Prove you are eligible to pay at least £145,000 in taxes locally in Jersey
Agree to buy or rent a high-value residence if you qualify for the High Value Residency scheme
Even if you were to be eligible for the scheme and meet all the conditions, High Value Residency is approved on a case-by-case basis by the local authorities. The ultimate decision will rest with the Chief Minister of Jersey (Jersey’s head of government) and the Population Office.
If you obtain High Value Residence status, as part of the scheme, you will be required to buy high-value property (alternatively, you would also be able to rent high-value property) on the island. If you are purchasing a home, you will need to buy a property of at least £1.75 million. If you wish to buy an apartment, the minimum spend is at least £900,000, but the apartment must be "noteworthy" in some way: be a luxury build, have sea views, etc. It’s worth noting that these amounts can change if the local authorities wish to implement new minimum threshold. Unless otherwise stipulated, any newly implemented minimum property rates are generally applicable as of January 1st the following year.
The quality of life in Jersey is genuinely superb - a reason why many seek to buy property or apply for mortgages in Jersey. With stunning landscapes and sea views, the island also offers excellent entertainment, leisure, activities, community events, and hospitality options. Jersey also offers easy connections to Europe, the Americas and Asia through London and Paris.
Jersey’s government has been keen to attract high-net-worth individuals to Jersey, but they have also been shrewd in their approach in doing so. High Value Residence is a sought-after status, but very few permits are given out each year, although getting residency through the scheme is by no means a challenge if you have the right profile. As a result, very select individuals have the High Value Residency status, and the island is a real haven for UHNWI, providing exceptional tranquillity, anonymity and security for those who wish to benefit from such qualities, in addition to Jersey’s other benefits.
It's perhaps worth noting here that while offering exceptional benefits and quality of life, Jersey is not a "tax-free" jurisdiction from a personal taxation perspective. If you don’t already live in Jersey but are interested in Jersey’s High Value Residency scheme, for example, you will need to seek out specialist advice to ensure you understand how potential residency would affect your fiscal position and how you will be taxed. Get in touch with our team at Enness to discuss mortgages in Jersey and your potential tax implications.
Property prices in Jersey have increased dramatically in the past decade. In 2011 a four-bedroom house on the island had a median price of just under £700,000. By 2020, the median price for a four-bedroom home had risen to more than £1.3 million. While there have been some year-on-year fluctuations, without exception, houses and flats of various sizes have continued to appreciate over the past ten years.
Overall, given the competition for property in Jersey and considering that there is more demand than supply, being in a position of liquidity is essential when it comes to buying property. Securing a mortgage offer in Jersey from a lender quickly is imperative to ensuring that the process moves as fast as possible, and lending isn’t overly burdensome, more time-consuming or stressful than it needs to be.
Generally speaking, the mortgage application process in Jersey is similar to that of the UK, although you will, of course, need to ensure you are eligible to buy a home on the island. Base rates for Jersey mortgages are connected to Bank of England rates and are regulated similarly to UK mortgages.
Depending on your profile, private banks (both UK-based or international) and alternative lenders may offer the most competitive rates and terms for a Jersey mortgage. You may also find that these parties can provide finance that is more flexible and tailored to your situation than high street lenders. No early repayment fees, high loan-to-value mortgages, or interest-only mortgages can be on the table depending on your assets, profile and the package you opt for. In contrast, these options will typically be out of the reach of Jersey’s mainstream lenders.
When it comes to rates for a Jersey mortgage, what you will pay will depend exclusively on your situation. Generally speaking, the more you borrow and the more risk there is for a lender, the higher your interest rate will be. Low loan-to-value finance or mortgages for highly liquid individuals tend to be at the cheapest end of the scale. Whatever your situation, however, Enness will be able to secure you the most competitive finance package for your personal scenario.
Jersey is part of the British Isles, but a Jersey mortgage is different from a UK mortgage. To maximise the advantages of a Jersey mortgage, it’s essential to understand what the differences are and how you can best benefit from financing a Jersey property purchase with a mortgage.
The main difference between UK and Jersey mortgages is that Jersey continues to allow resident borrowers to claim a tax deduction on the interest rate associated with a Jersey mortgage. The UK’s mortgage interest tax relief system has already been fully phased out. However, in Jersey, the current system will remain in place until 2025. The amount of tax relief you can claim will continue to reduce year-on-year until 2025 before it drops to zero as of 2026.
To take advantage of the tax relief on a Jersey mortgage, the property must be your primary residence. You must either be planning to live in it (in the case of a property you are buying), or you currently live in it and are taking out a mortgage to extend the property in some way (i.e., adding a floor, adding a garage etc.)
Many individuals buying property in Jersey have international income streams or have profiles that lenders can deem to be "complex." Complex scenarios can be anything from using your global assets to utilising multi-currency income or pledging future bonuses to secure more competitive rates.
If you have a complex scenario or you are a high-net-worth individual, you will likely need – and want – a more personalised financing deal than you will find on the St. Helier high street. Depending on your circumstances and financial background, you may also wish to look at less traditional options for borrowing – a short-term loan in the form of bridging finance, an interest-only mortgage, or a high loan-to-value mortgage, for example.
If you fall into this category, you may find that approaching lenders alone is tricky. As a leading offshore financial centre, many lenders have a presence in Jersey. However, reaching the right teams can be challenging if you make personal inquiries or rely on informal introductions from local contacts to connect with these lenders. Enness will be able to make these introductions for you and will present your case directly to the right parties to get you the best mortgages in Jersey – whether that’s with a local lender or an international institution.
In some cases, you may prefer working with an international lender. Alternatively, your usual bank in Jersey may not be able to offer you property finance or the rates or terms that your Jersey bank offer might not be the most competitive on the market. If so, you’ll be on the lookout for a lender. However, approaching international lenders will be a case of figuratively knocking on doors one by one. Without a partner like Enness to help facilitate the process of achieving a mortgage in Jersey, it can be a time-consuming and frustrating process.
Enness will start by listening to your requirements and asking you about your financial background. Enness will usually suggest working with a local lender if doing so will be in your best interest. However, if your broker knows that local lenders will not provide the best rates or terms, they will suggest alternative options.
Depending on your situation, requirements and how you wish to structure your mortgage in Jersey, international banks and niche lenders are often more able to cater to your situation or needs. If this is the case, Enness will explain your options and clarify how and why approaching the lenders Enness suggests will be more advantageous to you. Once you understand your choices and you’re happy with how your broker plans to proceed, Enness will approach lenders for you and will secure preliminary offers as quickly as possible – usually within 48 hours.
From their base in St Helier, Enness’ team in Jersey have experience helping high-net-worth individuals secure competitive Jersey mortgages to buy Jersey residential property.
If you would like to understand more about property finance packages in Jersey, get in touch. One of Enness’ specialist brokers will reach out to you to schedule an informal chat.Request a Callback