As some level of confidence starts to return to the banking and home owner loan sectors of the markets, many lenders are beginning to increase the maximum loan to value ratio they are prepared to offer to potential borrowers and in particular, to first time buyers in an attempt to provide a boost to the rest of the housing and home owner loan markets.

One building society has just launched a new scheme which allows buyers to obtain 100 per cent loan to value on a home owner loan or mortgage, providing that they are resident in the Channel Islands.

Skipton International has launched the product, known as “the next generation mortgage”, which is only available in Guernsey, Jersey and Alderney and as the name suggests, involves a family member putting up some type of security for 15 per cent of the purchase price. The first or second time borrower is able to take a loan of 85 per cent under the scheme, with the family guarantor placing the deposit in a special account with the Skipton.

Although they will not be able to access the money whilst it is used as security for the loan, they will be able to draw the interest from the funds, which currently stands at 2.00 per cent gross, thereby providing themselves with an income. As an alternative, the family member may use part of the equity in their own property in order to provide the 15 per cent security for the loan.

Nigel Pascoe of Skipton International said “This new account opens the door for first time buyers and those who might be struggling to raise their deposit from their own means, buy importantly does not require a third party to donate or lend funds.”