Rising mortgage rates affecting home buyers

Alex Garner says his mortgage rate already jumped twice before making the first payment

A first-time home buyer in Guernsey says he has seen his mortgage rate jump twice before paying the first repayment.

Earlier in June, the Bank of England increased rates to 5% - the highest increase in almost 15 years.

The increase means people not on a fixed mortgage could see their monthly payments go up.

Alex Garner recently bought a property with his wife, and said the increasing rise would affect their financial plans.

Mr Garner said his budget would be "tighter" than expected.

He said house prices in Guernsey were affecting the attractiveness of the island.

"There is without doubt an issue with housing in Guernsey whereby it is just so unaffordable, it's off putting because what's the point of being 25 in Guernsey if you're spending so much money on housing and you can't go out and enjoy yourself.

"It's no way to live."

Pierre Blampied said rising rates were a "serious" issue

Pierre Blampied, managing director of Guernsey Mortgage Broker, said the rise in rates could put further strain on the island's housing market.

He said: "We have a shortage of rental properties on the market, this is where it is really serious in my opinion.

"Landlords who have got a buy-to-let mortgage who have effectively got debt against that property, I think people are exiting the market because they're not getting the returns that they would.

"So they've passed on a significant rent increase, or they sell properties and we are seeing people sell rental properties if they've got [this] debt."

In May, the Bank of England raised interest rates from 4.25% to 4.5%, then up to 5% in June.