Housing crisis and island demographic “completely intertwined”

Wednesday 19 May 2021

Days after the revelation that the island’s average house price continues to soar, the Guernsey Party has published what it sees as potential solutions, including a new housing market called FRESHERS.

The ‘mix-adjusted’ average purchase price of a property in Guernsey is now £509,906, which is an increase of 15% from this time last year.

An increase in demand has sent the Bailiwick spiraling into a housing crisis; house prices have sky-rocketed, and people are finding it nigh-on impossible to find anywhere to rent.

Most recently, the States of Guernsey released its Quarterly Residential Property Prices Bulletin for January to March. Not only did it reveal that the average property now sells for half-a-million, but rental prices have increased by 10% as well. 

The Guernsey Party has stepped in to offer its answers to the problem. Deputies Mark Helyar and Nick Moakes have taken political ownership of the document, which purports that the crisis is intrinsically linked to the ageing population and low levels of immigration.

Pictured: House prices have reached record-breaking heights.

The GP breaks down its discussion paper “More affordable housing – finding the solutions for Guernsey” into two parts: the Ageing Demographic and ‘Generation Rent’.

In ‘Part One’ the GP has investigated and highlighted the “extremely unhealthy demographic situation” in the island. 

It’s common knowledge that the Bailiwick of Guernsey is facing a population crisis as well as a housing crisis. Current trends predict our workforce will decline by 8% by 2035.

This situation, according to the GP paper, would require 8,445 new workers to immigrate to the island by 2035. To solve this the GP are proposing a new market category; FRESHERS (Financially Resourced Earners with Sustainable High Expectancy Returns).

The theory is that this would only need 938 people to move to Guernsey instead, as they would pay around nine times as much in tax and social contributions as the average earner.

Pictured: The Guernsey Party promised new initiatives to help first time buyers in its 2020 manifesto.

However, the idea would still leave the island clamouring for workers to keep the island running and complete essential jobs. The GP would want work done to curate and maintain a “vibrant local workforce” too.

“This is where the correlation between dealing with our demographic timebomb and addressing the More Affordable Housing crisis completely merge,” the paper says. “One cannot be addressed without also addressing the other.”

Saving for a deposit is forcing most people into so-called ‘Generation Rent’, with people spending more than half their wages on rental properties and unable to save up a deposit for a house.

The GP commends the Guernsey Housing Association but says it is “just a drop in the ocean” compared to what the island really needs, and what it really needs is to build more. 

“Urgent action is required to address the problems of the planning restrictions, unlocking States-owned land sites to free them up for building new homes, removing prohibitive restrictions and disincentives for developers,” the Party says.

It wants to investigative “various financial and tax levers” to get first time buyers into the housing market. You can read them all HERE.

Pictured: The President of Employment & Social Security Deputy Peter Roffey said work is being carried out to better understand the island's housing needs. 

The Guernsey Party isn’t alone in keeping the issue high on the agenda. The President of the Committee for Employment & Social Security said work is being done to finalise the Housing Strategy Programme, to better understand what exactly is happening in the housing market.

“This is an active programme of work looking at the island’s housing needs, both affordable and private sector housing,” said Deputy Peter Roffey.

“Despite the need to develop strategy and good data we will not allow this to delay the urgent requirement to get on and actually create additional housing stock in the face of what is clearly a significant housing crisis,” he said.