OPINION: A change of pace

LAST week, I referred to the shortage of new listings coming onto the local market and how that could affect future sales. A quick check on the websites of estate agents engaged in residential sales reveals the extent of the shortfall.

As of 1 January, there were 91 local market properties listed for sale – 23 flats and apartments and 68 houses or bungalows. On the face of it this seems to offer a fair choice for buyers, although analysts would point out that an average of 85 properties were sold every month last year.

They would also state that among those currently available, only 11 fall in the category of within 10% below or 10% above the States’ current average house price figure of £554,290.

The method used to calculate the average price typically reflects the most active part of the housing market.

By way of example, twice the number of properties currently available in that category were sold in October alone.

Prices across the board currently range from a one-bedroom flat near Les Canichers in St Peter Port, for sale with Lovells at £180,000, up to a six-bedroom, six-bathroom farmhouse in rural St Andrew’s with granite outbuildings, swimming pool and nine acres of land, for sale with both Cooper Brouard and Swoffers for £2.95m.

In fact, 22 of the 91 local market properties currently available are priced in excess of £1m.

Naturally, there will be a number of prospective sellers listing their properties for sale from this day onwards, having purposely waited for the festive season to close. They will be welcomed by eager buyers as Guernsey’s housing market once more moves up a gear.

But is there sufficient choice available for the new prospective sellers? Where will they move to if a keen buyer wants to buy their property?

This is an old chestnut, when owners wishing to sell sometimes wait to see a suitable property to move into before marketing theirs, trusting others to make the first move.

Not that the vendors of every property need alternative accommodation. New houses are already in course of construction and various other-use buildings are being converted into residential accommodation. Inherited properties all-too regularly come onto the market, as do others, regrettably, as a consequence of relationship breakdowns and occasional bank repossessions. Some landlords will decide to sell their rental properties with vacant possession, and every year there are local and licence-holder homeowners leaving Guernsey.

If none of these are for you then perhaps properties being sold by their eventual buyers will be suitable.

With this in mind, owners considering moving should not defer having their property valued and telling estate agents exactly what they are looking for, especially if unsure of their prospects in the market. This is where a good estate agent with an ear to the ground can make a difference, making introductions that might otherwise be missed. Others will have done the same and even have full details prepared for immediate release when they’re ready to enter the fray.

The message is clear, the market will remain strong despite any loss of impetus. Those sellers prepared to take the initiative will benefit most when it comes to their next purchase.

I’ve been taken to task, and quite rightly, for my comments last week about the ready availability of home-buyer mortgages. Numerous first-time buyers are having their mortgage applications rejected and the principal reason surrounds an individual’s credit history.

The pandemic has worsened the situation for those who have experienced disruption to their employment, perhaps through furlough or redundancy, especially if they have been in credit-card debt or used pay-day loans to manage their finances. Gaps in employment generally are unhelpful as are an existing overdraft or weighty student loan.

Paradoxically, having no credit history can also damage a person’s chances of securing a mortgage.

The essential issue here is that debt itself is not the problem. How well the debt is managed is what matters.

There are many websites with helpful advice for improving credit ratings and the overriding suggestion is to demonstrate responsibility and commitment. Curbing expenditure in general is the personal responsibility of the individual, this about improving one’s credit rating. For example, set up direct debits to pay off existing debts and regular bills in the future, such as rent, utility services and even streaming subscriptions.

Stay clear of the credit limit on credit cards, and never use them to withdraw cash. Those without a credit card should get one and ensure it is paid off monthly. Do not keep unused cards.

Even registering on the electoral roll provides an individual with grounding and the type of practical security mortgage lenders look for.

Not only could it be the difference between getting a mortgage or not, it can also affect the type and amount of mortgage offered. The less perceived risk involved, the more chance there is of needing a 5% or 10% deposit, instead of 15% or 20%, which virtually rules out buying a house for most first-time buyers in Guernsey.