The average rental reached £1,817 per calendar month in the second quarter of 2022, which is 9.3% higher than the previous quarter and 14% higher than the second quarter of 2021.
Gill Mooney, who leads the lettings team at Savills Guernsey, said the increase was due to an imbalance between supply and demand.
‘There are still not enough rental properties available to meet people’s needs – and that’s especially true for larger family homes,’ she said. ‘So long as demand continues to outweigh supply, there will continue to be growth.’
One issue raised by Alpha Estates director Damien Wood is investors buying a large number of family homes and renting them out at high rates.
‘There are still a lot on investors coming out of the woodwork to buy properties,’ he said.
‘In my eyes investors should be able to buy as many houses of multiple occupation and apartments as they like, but they shouldn’t be able to buy up the houses.
‘Investors are buying up to dozens of family homes and renting them out at extortionate rates. This means the houses aren’t going to families.’
He attributes this to investors buying with cash, enabling them complete a purchase quicker and easier than a family who require surveys and mortgage applications.
‘Although the family could afford to buy it, they end up having to rent it for a rate far higher than any mortgage payment would be,’ he said.
‘There will always be a need for some people in the housing market to rent as opposed to buying as they may be transient.
‘However, we are now seeing more people living in rented accommodation that they would far rather own and also be better off financially.
‘[Investors] shouldn’t be allowed to own more than two family homes. It is morally wrong.’
The average purchase price for local market properties, as calculated by the States, has also increased, reaching £598,963 in 2022 Q2 – up by more 4.5% from the previous quarter.
Properties are being snatched up quicker than ever, with the average time between a local market property becoming available for purchase and its subsequent sale showing a steady downward trend since the second quarter of 2018.
Mr Wood believed that some estate agencies overshoot their valuation of a property in order to profit.
‘We are seeing crazy prices,’ he said. ‘People agree to pay the price because the market is so volatile at the moment. They are willing to pay above the worth just to be settled.’
He says this means lenders are refusing to lend the full amount.
‘For the first time we are seeing more properties failing surveys because of financial reasons. In the past it has always been for structural reasons.’
Two-bedroom properties, including apartments, houses and bungalows, were the most common sale, making up 32% of the total local market sales. This was followed by three-bedroom properties, then four-beds.
There were 22 local market transactions of £1m. or more in Q2 2022.
Mr Wood said: ‘The island is missing larger family homes of three, four or five bedrooms. I would love to see a restructuring of the market.'
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