‘Those unable to get on housing ladder will leave’
MORE young people will be forced to leave Guernsey because they cannot get on the housing ladder unless action is taken.
The warning from property expert Charles McHugh came as one entrepreneur said the island was facing an ‘emergency situation’ over the issue because it could lead to a shrinking but ageing population.
‘The private sector is under siege by Generation Rent, mainly the under-40s,’ said Mr McHugh, when he addressed a 160-strong audience at the Chamber of Commerce’s monthly lunch at the Old Government House hotel yesterday.
‘Only 26% under 30 today will become home owners by the time they turn 30. Now it seems growing numbers of under-40s will be competing for private rental properties.’
He added: ‘The unintended consequence of the emergence of Generation Rent is predicted to be an explosion in the housing benefits bill once millennials reach retirement.
‘These combined pressures on the private and social renting will, it’s predicted, result in more of the island’s young people being forced to move away from the island creating unintended deeply divisive social consequences.
‘A much better solution would be to have progressive housing policies that encourage Generation Rent to achieve home ownership.
‘We should be allowing our young people, first-time buyers, to acquire a house that is a modern, well-insulated – both sound and heat and everything else – under £225,000.
‘I think we need a first-time buyer loan scheme.’
Mr McHugh, a partner at the Guernsey-based Strategic Development Partnership, added: ‘This could be a trial, a limited number of applicants. But this would be the start of fixing the stuck market.’
Transaction costs, which were twice those in Jersey and the UK, needed to be lowered as well while the planning system could be used to designate first-time buyer zones and encourage modular building affordability.
Positive action could boost the construction sector and property related tax revenue for the States, said Mr McHugh.
The Guernsey Housing Association was applauded by the housing expert for having built nearly 900 homes, but he added: ‘They need more types of intermediate housing.
‘It’s not enough to have just partial ownership and rent. We need to allow people to progress into whole 100% ownership, not to be topped out at 80%.’
During the event, entrepreneur Martin Belcher called for the use of Leale’s Yard on the Bridge as a site for first-time buyer housing – warning that Guernsey was ‘almost in an emergency situation’ if it kept losing population while the remaining islanders got older.
