First-time buyers in the Faroe Islands to borrow five percent for housing down payments

First-time buyers will be able to borrow five percent for a down payment on housing. This statement comes from Bárður á Steig Nielsen, the chairman of the Union Party.

The Union Party emphasizes that it is challenging for individuals to save enough for a down payment when they are looking to purchase their first home. They have proposed several housing policy measures aimed at making it easier for young families and families with low to middle incomes to access the housing market.

One of the key recommendations is the establishment of a housing fund with 200 million kroner, from which first-time buyers could borrow five percent towards the down payment for a home, with a maximum limit of 200,000 kroner. The proposed fund would be financed by Faroese banks, which are expected to contribute 20 million kroner annually over the next decade, after which the fund would be self-sustaining, according to Bárður á Steig Nielsen.

However, Søren Bruun, director of Suðuroyar Sparikassa, warns that this initiative will impose additional pressures on banks to meet stricter requirements related to various buffers. He believes that if the supply of housing does not increase, the housing market will simply become more expensive.