Subsidies for key workers ‘fuelling high rental costs’

Private landlords have revealed that some States staff coming to the island on deals which include housing subsidies are offering to rent houses at much higher prices than landlords are asking.

Environment & Infrastructure president Lindsay de Sausmarez told the latest meeting of the Guernsey Private Landlords’ Association that her committee was determined to deal with the problem.

‘We are very aware of that. I have been kicking off about it for years – longer than this political term,’ said Deputy de Sausmarez.

‘It is one of the things we are covering in our key worker housing strategy through the Guernsey Housing Plan.

‘It is unfair on local teachers, nurses, police officers and the rest.’

She was responding to claims made at the meeting that the States was making rental properties less affordable by offering incoming workers generous housing subsidies, and guaranteeing them for an extended period of time.

Deputy de Sausmarez claimed the size of the private rental sector was another major problem facing her committee, which is responsible for States’ housing policies, at a time when housing costs on the island have been independently assessed as the least affordable in Europe.

‘More than 26% of accommodation in Guernsey is in the private rental sector, which is a very large proportion compared to other jurisdictions,’ she said.

‘We’ve got the smallest of all affordable housing sectors of comparable jurisdictions and the private rental sector is picking up the slack.

‘46% of those in the lowest quintile [of earnings] are in the private rental sector.

'A good chunk of those would probably qualify for affordable housing, but they’re not able to access it because of the lack of supply.

‘We have to make better use of our existing housing stock. But there continues to be a lot of work on the supply side as well because there is a really big gap between the number of planning permissions issued and the number of units actually completed.’

In 2023, the States agreed that the island needed about 1,600 new housing units by 2027, but last year only 94 additional homes were created.

The independent assessment carried out by housing experts revealed that the average rent was equal to 56% of average earnings.

Deputy de Sausmarez said that was ‘systemically unaffordable’ but that the problem had existed for decades.

She told landlords she knew it was not because they were unnecessarily profiteering.

‘There has been an awful lot of pressure on landlords incrementally over many years now, and it is a particularly challenging environment for landlords with mortgaged properties,’ she said.

‘We understand that there are significant pressures, such as lack of supply and also challenging economic circumstances.

‘We have also seen some policy changes over the past 10 or 15 years which have negatively affected landlords, so we do appreciate that there has been increased downward pressure on landlords and for that reason a reduction in the overall numbers of private rental properties.’

Concerns were expressed at the meeting about whether rent controls would be re-introduced in Guernsey, following talk of such measures in Jersey.

‘Rent control is not on the agenda. I am not anticipating us going along those lines in any way,’ said Deputy de Sausmarez.

She was more open to stabilising rents, an issue which the British-Irish Council has been looking at.

But a priority for her committee was introducing minimum standards of accommodation and providing landlords and tenants with stronger rights.