A company which hopes to direct £100m of investment into Sark real estate and help residents obtain mortgages, says it is “not exaggerating” in hoping to create a “modern day utopia” on the tiny island.
The Sark Property Company, run by Seigneur Christopher Beaumont and Swen Lorenz, the CEO of Sarnia Asset Management, have worked on shared goals for the past few years and hope to financially back a substantial development plan for Sark.
They plan to purchase a string of real estate and develop it, or improve it, within existing laws, but preferably they wish to support the development of a multi-decade island plan alongside this, rather than solely for their prospective estate.
Mr Lorenz said any plan would cost hundreds of thousands of pounds, with Mr Beaumont adding that such a document would not be able to come from the island’s government.
By properly utilising derelict and unbuilt plots they believe the island’s population could be doubled to around 1,200 people.
Mr Beaumont fears the consequences of the silver wave - as the average Sark population is now the “wrong side” of 65, which'll squeeze the working population to around 200 people.
The pair were behind bringing The Prince’s Foundation to the island for a “visioning exercise” in April, which saw a significant percentage of the population turn out to detail their concerns and desires. Sark Property Company (SPC) paid £50,000 to make this happen.
It was crucial to have a trusted organisation that works from the bottom-up to feed into any transformation of the island, they said.
“I have, as is well known, quite extensive experience working in the Galapagos Islands, which is also a remote small island community. And I feel very strongly that in no remote island community can you ever do anything against the community, you can only do it with the community,” Mr Lorenz said.
“And we are bringing some possibilities to Sark that we feel strongly have value and should be debated. We are keen to get our thinking out into the public domain. And, to tell everyone that we are here to listen, to learn, to hear everyone's views.”
“We are confident that this in some shape or form can go ahead. But it's not your standard real estate development or project. It's very complex and that requires a lot of upfront investment on our side, and a lot of stakeholder engagement,” he added.
Pictured: Christopher Beaumont and Swen Lorenz.
Bolstering Sark through investment is important to ensure it remains a standalone and sustainable community, Mr Beaumont said.
“There's always a danger for the bigger islands of the smaller islands failing, and that comes at a considerable cost to Guernsey, or could do… so having an investment case in Sark and, if we're able to bring it to fruition, will de-risk Sark for Guernsey and it will take a huge amount of pressure off.”
He said it would be preferable to have a “resilient, sustainable Sark on its doorstep, doing its own thing in its own way, without costing the Guernsey exchequer any money”.
Contributing cash to a substantive development plan is in SPC’s crosshairs for this reason too.
“We would love to be supportive in some shape or form, which means paying for some or all of it - to say, 'Let's do an island plan for the entire island.' Part of which is then our real estate portfolio. And that's our offer. And we need to see whether that offer is finding interest,” Mr Lorenz said.
Pictured: SPC say it wants to develop the island sympathetically to protect its natural assets.
Mr Beaumont argued that Chief Pleas – Sark's parliament – would be unable to undertake such a project, partly due to limited outside contacts and cash for major consultants, but also due to resource capacity that sees it only able to bring forward two pieces of major legislation each year.
While a legal pathway to mortgages was adopted in 2021, Mr Lorenz said banks have “shied away” from lending in Sark due to the risk and complexity of a tiny market, and “because of the history of Sark”.
SPC plan to send out a survey in the coming weeks to gauge the appetite for mortgages in the island, with a view to act as the first-loss guarantor for loans of up to £5m. Feedback from residents indicates the lack of home loans is a big concern for those wishing to stay in the island.
“Unless someone steps in and facilitates overcoming these barriers, I don't think anyone will offer mortgages in Sark. And, on the other hand, if we become the kind of large investor in Sark that we are aiming to be then it's very easy to make space in our budget to say we become the first-loss guarantor that is needed to get this off the ground,” Mr Lorenz added.
The hope is to gradually facilitate lending to purchasers, prove it can work, and open up to other lenders.
Butterfield Bank have been engaged to offer a route to home ownership, have visited the island, and spoken to the local Chamber of Commerce.
Mr Beaumont highlighted that the absence of land-based lending continually blights, even in instances where the risk to lenders is minimal.
“A sale recently took place over freehold property on the island, and even they couldn't get a mortgage,” he said. “A freehold offers no risk from a sort of a badly written lease or some such thing. So, the fact that nobody is able to avail themselves of lending, particularly secured lending, causes a problem."
Mr Lorenz added: “There's just a lack of confidence in the island when you put it together with what happened in the past - or didn't happen. And that's why even someone who buys a freehold can't get a mortgage. It's not down to the property, it's really down to Sark as a whole."
SPC estimates that an additional 600 residents could be housed if the existing property portfolio, including derelict and incomplete plots, are used effectively.
Pictured: One of several prominent dilapidated properties in the island.
Derelict homes and hotels were among the most derided elements of the island at the Prince’s Foundations’ scoping exercise. Mr Lorenz said there are several plots which have foundations installed, but work has stopped for decades.
The space required to do so is not an issue but big improvements to utility services would be required, the precise details would need to be worked out according to Mr Beaumont.
“Does that have an effect on the electricity supply? Of course it does. Does it have an effect on sewage? Of course it does. Does it have an effect on the water supply? Yes, of course it does. But we need to quantify all that we don't know. That will be part of the what ifs that we have to work our way through.”
Livable properties lying empty for much of the year was also a concern raised by residents. Mr Beaumont said concerns over Sark being used for tax avoidance purposes, as raised by residents at the community meeting, are a “busted flush”.
“You don't pay tax because the state gives you nothing back. There's no welfare state. There's no pension provision. There's only education up to 16,” he said. “You could say that if you went to a high tax jurisdiction, and you managed to avoid paying all the tax that everyone else gains, but that’s not what happens in Sark."
But the pair did criticse a “very unusual legal situation” in which individuals can claim tax residency in Sark without any requirement to be present on the island for a set period. They have lobbied the Sark government to change this, but other pressing issues have seen it fall down the political agenda.
This adds pressure to the supply of housing, they added, which the island on its own will struggle to deliver for lack of suitable owned land and capacity to build.
“Whereas with investment, and with a property portfolio, you have an option to start looking at how you create housing that is affordable to live in. Not luxurious, not substandard, not full of mould. I mean, you don't have to look very far in Guernsey to find people complaining about the fact they're paying the earth for something that's substandard. We don't want any of that,” Mr Beaumont said.
The waiting list for housing is enormous, he added.
Pictured: Residents can comment again on the future of the island once The Foundation publishes its report.
While they had little to say now about serious and suitable co-investors, the pair said a process of several months should determine if their ambitions can continue, with more details likely in September following the publication of The Prince’s Foundation’s report.
That report will be published in July, and another period of consultation and feedback with the community will commence.
Mr Lorenz concluded: “We have a lot more work to do. And over the next weeks and months, we'll put more communication out about specific subjects that we feel should be looked at in more detail and where we feel we have more information to publish."
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