With a housing market stretched thin between first-time buyers and meeting the demands of a growing population, one of Jersey’s main estate agents suggests that the real ‘crisis’ lies elsewhere – in freeing up under-occupied, mid-market family homes.
As the price of an average Jersey home overtakes the London market, Broadlands Director Harry Trower says the key to bringing more flexibility to the market is encouraging older homeowners to downsize.
With newcomers entering the island at a rate of over 1,000 a year, the equivalent of a small town will need to be built in the next decade to keep up.
No wonder that ‘housing’ these days is so frequently appended by the word ‘crisis’, but how much longer can it go on?
Pictured: Various factors are scaling up the demand for housing in Jersey.
Express got the inside track from the experienced estate agent as he offers his insights on fulfilling the demand for homes in Jersey…
“People were having meltdowns in the office,” Harry Trower says, eyes wide, no hint of exaggeration, as he recalls his inaugural year as an estate agent.
It was 2008. The property crash had just hit. Go figure.
But, rather than dive headfirst into gloomy nostalgia, the Broadlands Director U-turns in mild crescendo: “But I just watched it getting better and better and better.”
So great is the appetite for property in Jersey at the moment that Harry finds himself having to strategically decide when to put some properties online.
“My phone will not stop ringing. It’s that mental. I have to wait until I have time to answer my phone. It’s just bananas. If you’ve got three bedrooms, a garden, parking and a garage, it goes like that,” he says, snapping his fingers.
And we’re not just talking new builds – even 70s properties that might once have been dubbed ‘dated’ are flying.
“I’d love to get my hands on an old 70s detached house, with the swirly carpet and things like that. I think they’re cool. If you’ve got Pinterest, it’s kind of ‘in’ right now… What you could do with those houses is probably better than buying a newbuild where you’re restricted with Planning. The cost of those is going up because the demand is so high.”
Despite the industry generally following the trend of “flat out until Easter, dip a little bit, flat out until summer, dead, then September everyone tries to get on before Christmas”, Harry reports that life at Broadlands in recent years has only been ‘flat out’ with the team only able to catch a breath for the first time recently.
While one might expect signs of booming business to be welcomed, Harry doesn’t exude the cocky, smooth talking energy of his professional stereotype as he expresses on the matter.
Pictured: "Harry reports that life at Broadlands in recent years has only been ‘flat out’". (Gary Grimshaw)
Instead, the Director’s words are weighted by a heavy sense of realism as he reflects on the latest House Price Index.
“It was painful to see the figures. It’s tough, but it’s just the way things seem to be at the moment… But how is that sustainable?”
The average price of a property in Jersey went up yet again to £521,000 in the third quarter of 2019 – a rise of 8% on the previous year.
That put Jersey well above London – a location touted as the epitome of millennial housing woe – where the average was £477,000. It was also well above Guernsey.
Three-bedroom houses (a.k.a. the ‘typical family home’) stood £53,000 higher than the annual average for 2018 at £633,000.
High prices were equally abundant at the very bottom of the scale, with one-bedroom flats going for £263,000 – the highest mean price to date.
Great news for sellers, but not so much for those looking to buy, particularly given that rises in average wages among islanders aren’t keeping step.
But what’s driving the price rise?
“What is there on the market? There is no stock. If you speak to the agents at the moment, the biggest problem is instructions.”
Jersey’s population is ballooning with over 1,000 entrants per year, thanks to the previous government’s failure to enforce its promised cap of around 325, and the incumbent’s lack of a new policy.
And that would be fine – inward migration is often a sign of a buoyant economy – were it not for the fact that there are, quite simply, not enough homes.
A £14.4k report commissioned by the government’s social housing provider, Andium Homes, found that as many as 7,000 new homes will be needed by 2030. That’s as many as in the City of London.
As per normal market rules, the more intense the demand (right now, it’s a “bunfight” among the island’s growing number of agents), the higher prices will soar.
Pictured: Population increases and demand causes prices to soar.
Let’s not forget that comes against a difficult inflationary backdrop (2.7% in September 2019, with housing costs a main contributor).
Such circumstances, it’s feared, could lead some to give up on homeownership or, at the more extreme end, may even spark an exodus of skilled local workers, as Jersey people become priced out of their birth home.
“At some point, people are going to start turning around and saying, ‘Mmm, don’t think I’ll pay that.’ It’s still cheaper to buy than rent here, but once you start saying, ‘Well, for your standard three-bedroom terraced you’re going to have to pay £600,000…’” Harry pauses, making a face.
That hasn’t happened yet, though. The market remains finely balanced – helped by the fact that a third of the population is in ‘rental stress’ (spending over a third of one’s income on rent) and many are keen to escape.
But, according to Harry, a “market reset” could be on its way.
Not a “full crash”, he hastens to add – the banks nowadays have enough safeguards to prevent that from happening – but “a soft reset”.
“Not down to 2013 levels – the lowest since the recession – but probably to 2017 levels. People who bought in 2013 or after the recession will have still made money on their houses, but just drop a little bit.”
In the current circumstances, it’s those making their first steps onto the property ladder that lose out.
One way to help them is by listing properties as ‘first-time buyers only’ – but this doesn’t happen often enough as sellers don’t realise they can get “market price”.
“There are so many first-time buyers out there, you’d still make money.”
There’s hope on the horizon for that demographic, though, with Harry enthusiastically listing upcoming developments including La Motte Street, the Soane, the Metropol, Le Masurier’s Bath Street regeneration, and Andium Homes’ “brilliant” Gas Place scheme, which will also extend Millennium Park.
The new Waterfront ‘Horizon’ development is also well underway, but mostly popular with ‘buy to let-ers’.
Conversions are gaining popularity among younger buyers, with office block transformations accordingly on the rise. Harry says he’s also spotted an uptick in the number of locals modernising lodging houses.
“Due to the new building controls, they’re not like the old conversions in the 90s where you can hear someone going to the loo – they’re well soundproofed. They have to pass stringent tests and they’re quite nice size-wise.”
But while these mass builds go some way to solving Jersey’s 7,000-strong housing conundrum numerically, there’s a problem with them becoming the development default: “Not everyone is going to want to live in a one-bedroom apartment.”
As a result, a “huge gap in the market” has opened up that no one is talking about: the ‘next step’ home. Think families with older children or middle-aged couples seeking more space and privacy.
Pictured: The 'next step' home is the niche no one is talking about, according to Harry.
“If you’re moving from a first-time buyer home, you’re like, ‘Great, I’ll sell that and make £150,000 on the house so that bumps me up so now I can look at £800,000.’ But there is nothing. Look between £600,000 and £900,000 and see if anything jumps out worth moving into.
“The houses that used to be £900,000 are now £1.2m. The ones that were £1m are now £1.4m.”
And those that can afford to splash out don’t actually get much more: “There will be a new build, and £1m is put on it straight away. You might get an extra bedroom, a garden, parking, a garage, maybe. It’s tough.”
Developers are naturally loath to sideline profit to fill that niche.
“If you have a nice big plot you can fit ten £900,000 houses, but immediately you could also fit 25 three-bedroom terraces.”
There’s also a “ton of old granite” sitting on the market according to Harry, but redeveloping these older properties into “a little hamlet of a couple of little houses doesn’t seem to be done any more”, as planning restrictions can make it a burdensome endeavour.
So how to solve this dearth?
“They are trying to incentivise downsizing but it’s very hard to convince someone to move from their lovely big private detached house.
“So if you say, ‘We want you to live in a nice little hamlet, purpose-built for over-60s’, it’s kind of depressing for them… If you try and convince someone to move out of their four-bedroom house and they’ve already got a downstairs bedroom and bathroom so it’s future-proofed, why would they move? The grandkids can come and stay.”
Over-55s schemes are popping up more and more to tempt older generations out of under-occupied homes, but Harry isn’t convinced.
“You want your space and privacy, especially if you have been used to it. You can’t pigeonhole people – there are 70-odd people in a wheelchair, and 70-odd people who do triathlons. Over 55s developments should really be re-aged… Freedom of choice is important,” he says, laughing at how his parents would react if he told them to downsize.
It’s one of the many areas Harry believes is being overlooked by government, whose Housing Minister, Senator Sam Mézec, he says is “wasting time” focusing his attentions on tackling ‘high-value’ residents and foreign 'investment' buyers.
Both categories are often blamed for driving up prices – but Harry disagrees, saying both operate “in their own bubble, which doesn’t need to be poked and prodded".
He says that there aren’t as many of the latter as believed, and notes that those entering via Locate Jersey – all of whom must buy a property with a saleable value of more than £1.75m – barely dent the ‘regular’ market.
“It’s very separate. What a lot of people don’t see is that they have to bring their business with them. They also do work on the properties they buy and employ local tradesmen.”
These aren’t the only areas where Harry finds himself clashing with the Minister – the handling of the sale of St. Helier House is another sticking point, while the release of the latest House Price Index led tensions to spill into a heated exchange on Instagram.
While recognising the success of the government’s 2013 deposit scheme – a £3million pot that helped 51 applicants secure their first home – he notes that reviving it would only provide a “short-term solution”.
The only way to start truly easing the strain is to take the “blindingly obvious” step of freeing up the “huge sites” on their books, such as St. Saviour’s Hospital.
He also hopes to see the former Les Quennevais School site freed up (“they’ll have to do something with that – it’s an incredibly popular area”), adding: “If they sort the hospital, you could renovate the whole of Cheapside.”
Pictured: There are sites across the island that the estate agent would like to see freed up for housing.
Some progress is being made on this front – in November, the government unveiled a major downsizing project that will see 1,600 employees moved to a new HQ, freeing up to nine sites for potential housing (and allowing them to pocket around £28m in the process).
Other potential areas will also be highlighted in the Island Plan 2021-2030 – a blueprint for the future ‘look’ and ‘feel’ of Jersey – which is due to be released in draft form in mid-2020.
Naturally, not everyone will be pleased, and some may complain that more development – though necessary – will harm Jersey’s character.
Of course, there must be a joined-up approach – not only to meet the government’s objective of ‘putting children first’, but of maintaining Jersey’s status as an attractive place to work and live.
After all, affordable quality homes can make the difference in securing key workers across the vital areas of health and education.
Indeed, Jersey’s NEU President recently explained that two teachers recently declined a Head of Department role "at the last minute" after realising the cost of living and buying a house.
It’s not just about putting roofs over heads, but ensuring Jersey remains an ‘island home’.
This article first appeared in Connect magazine. Click here to read it in full.
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