E&I in cautious approach to open market expansion

Its long-awaited proposals, which will come into effect if the States agrees new enabling legislation in March or April, include allowing an average of three new property inscriptions on part A of the open market each year.

The States initially hoped that the reforms could raise about £5m. a year for the public purse, but the final proposals are more likely to raise in the region of £1.5m. a year, with new inscriptions being charged a flat fee of £500,000 each.

The number of new inscriptions to be allowed annually was reduced following months of consultation with industry experts and other States committees.

‘There were polarised views on the right number, which were all valid, with some saying it could go much higher and some saying no new inscriptions at all,’ said E&I president Lindsay de Sausmarez.

‘I agree that three is a low-risk approach, but it will be monitored and reviewed through collecting evidence and dialogue with industry. If, after a few years, it becomes clear that number could be increased, then a future committee could do that.

‘The open market performs an important role in our economy, catering for a broad range of people, and we certainly did not want to start destabilising it.’

At one time, about 1,700 properties were registered on the open market, but in recent years the number has declined to about 1,500.

The origins of the open market were a series of legislative and policy changes which started in the 1950s. E&I believes that the rules governing it have failed to keep pace with residents’ demands and now lack flexibility.

‘The primary driver here is not the generation of income for the States, though that is a helpful consequence, but rather allowing the open market to work as well as it can,’ said Deputy de Sausmarez.

‘The open market was developed decades ago and has been more or less preserved in aspic ever since. The market has not previously been allowed to adapt and evolve. It is just not being allowed to function as effectively as it could.’

E&I’s new policy which the proposed legislation would allow to come into effect would also create more flexibility for applicants wanting to transfer part A inscriptions from an existing property to a new-build or between properties currently on the open and local markets, provided they comply with a range of conditions to prevent misuse of the rules.

One change would make it easier for long-standing open market residents wanting to downsize to swap their part A inscription with a smaller local market property. That would attract a fee of only hundreds of pounds to avoid putting barriers in the way of downsizing.

Deputy de Sausmarez said the new policy would bring benefits to the open market and local market, as well as raising a seven-figure sum annually for the States.

Previous discussions about rule changes have knocked confidence in the open market and E&I has emphasised throughout its proposals that they would not remove or reduce any pre-existing rights acquired by residents of the sector under population management or housing control laws.

The Guernsey Press revealed early last year that the previous process for adding local market homes or new properties to the open market register had been suspended amid claims that a small group of applicants were trying to exploit the rules for financial gain before the introduction of higher fees for transfers.