"I very much hope my comments on the podcast are not interpreted that way"

Monday 08 April 2024

Deputy Lyndon Trott has sought to clarify what he meant when he was recently quoted as saying he wanted average house prices to drop by a third.

The Policy & Resources President was being interviewed by the Guernsey Press about the island’s current housing challenges.

Responding to questions, the Chief Minister commented on how the current average house price in Guernsey is more than 15 times median earnings. That is amongst the highest in Europe, and Deputy Trott said in his view that is "completely unsustainable".

During the interview, Deputy Trott said it was unrealistic to expect the ratio of earnings to house prices to fall to the very low levels seen several decades ago, but if the ratio could return to closer to 9 or 10 times median earnings, it would be a positive outcome and would help align the island more closely with other western European countries including France, Germany, Luxembourg, or Switzerland.

However, since that interview was published there has been some political and public kickback to his comments with some people fearing negative equity if their house's value were to drop suddenly. 

Deputy Trott has now released a statement saying he wants to ensure his comment was not misunderstood as a target, or pointing to any specific policy for reducing existing house prices and negatively impacting homeowners.

Deputy Trott said: "There are a number of ways in which we could improve the affordability of house prices without creating shocks or damage to the housing market, and not least is increasing median earnings. If we continue to see good economic growth with people earning more, if wages begin to rise faster than house prices, that on its own would improve affordability.

"Coupled with that, we must progress full speed with some of the key housing developments the States are involved in, which could increase supply at the lower end of the market and provide some specific social and intermediate housing which is also badly needed. Making progress in these areas will help address some of our housing challenges, and may move us gradually towards a more affordable average house price.

"Certainly, as I said on the podcast, we do not want to see a dramatic fall in house prices, which would only be the result of our economy declining significantly through some unforeseen external development, because right now our economy is in a very strong position after two years of good growth. We’re working with colleagues in Environment & Infrastructure and Employment & Social Security to explore carefully what other measures we can pursue to address our housing challenges, informed by expert advice and the Guernsey Housing Plan.

"I am not one for making policy on-the-hoof and I very much hope my comments on the podcast are not interpreted that way. I am also known for being open and transparent with my views and not ducking questions, which is why I responded on this topic when asked by the Guernsey Press. I hope people don’t take those comments out of context and would encourage them to listen to the full podcast.

"So to be clear, my focus and the focus of my colleagues on the Policy & Resources Committee is to support economic growth wherever and whenever possible, and to see earnings increase and living standards improve."