Today in the House

‘We haven’t heard an awful lot from them,’ says Deputy Neil Inder, president of the Committee for Economic Development, adding that he expected a plan of action which hasn’t materialised. Deputy Inder wants the Policy & Resources Committee to pick up the baton dropped by the Housing Action Group and deliver within the coming months a cohesive and centralised plan – what he calls a singular vision – to tackle Guernsey’s housing crisis. Notably, president of P&R, Deputy Peter Ferbrache, has seconded the amendment.

For his part, Deputy Ferbrache wants greater government intervention in the housing market, including additional public investment of hundreds of millions of pounds. This will come from the proposed sale of Guernsey’s entire stock of social housing to the Guernsey Housing Association.

‘We could invest that money in buying land at reasonable prices,’ to paraphrase Deputy Ferbrache, ‘and make sure developers make a profit but not an excessive profit.’

The GHA is likely to be given the responsibility of providing and managing most, if not all, of the ambitious scheme’s properties, but with what objectives?

Deputy Inder has already indicated the scheme would not be restricted to social or key worker housing and Deputy Ferbrache is keen for Guernsey people without a bank of mum and dad to buy plots of their own.

In similar terms, deputies Peter Roffey and Lindsay de Sausmarez will reiterate their committee’s proposal to allow eligible islanders to buy newly-built homes at 75% of their market value, again in conjunction with the GHA. This is aimed at ‘a very focused market’ of those with greater resources than the typical applicant for partial ownership but unlikely otherwise to afford to buy on the local market. It will vest in them complete freehold ownership, for example qualifying under inheritance laws. Any resales will be at 75% of an independent valuation of the market price and hopefully covenants will ensure only prospective owner/occupiers can buy or, if inherited, retain them.

Sites for GHA properties tend to be purchased using States grants. ‘In other words, taxpayers’ money,’ says Deputy Roffey, ‘so it seems completely legitimate to use those sites to help as many islanders as possible, including those who aspire to home ownership.’

It is here that the States must tread carefully. In its haste to act for the good of the community our deputies must not release massive public wealth into private hands. Above all, the balance of initiatives under the Government Work Plan must be future-proofed in favour of the exchequer.

We know that the proposed sale of social housing will incur an annual loss of rental revenue in the region of £20m., which must be recouped or bettered with investments not just in the community but specifically in property producing similar capital returns year-upon-year.

Why not, for example, reinstate a Homes for Workers Loan scheme for the discounted buyers? In fact, make it compulsory. Choosing a competitive interest rate will benefit the buyers and provide the exchequer with long-term returns, while maintaining the States’ alliance with these valuable assets, especially if the GHA has first option to repurchase any of the properties put up for sale.

On a wider scale, the States must take a more business-like approach to planning, looking at the broader picture and adopting a give-and-take method of land-use classes in the residential, commercial and industrial sectors and developing neighbouring half-acre gardens island-wide without having to resort to agricultural land as such.

There is a need to concentrate on identifying and encouraging wholesale redevelopment models with broader objectives and aspirations, rather than overindulging individual planning applications and imposing village-centre modules on an island measuring little more than seven by three miles.

As good as they are, however, these hard-line approaches will take time to implement. By then the housing market will have a totally different complexion. How about action now?

I’ve written before about small changes the States can make immediately to help persuade young buyers that they do have a future in Guernsey. I make no apology for repeating some on the day the States makes a call for action.

Admittedly, taxes were reduced on lower value conveyances with the introduction of tiered levels of stamp duty, also known as document duty, but that was five years ago and bears little resemblance to today’s property prices, certainly not from a first-time buyer’s perspective.

Give them a stamp duty holiday and simultaneously introduce a 3% stamp duty surcharge for residential purchases by existing homeowners, such as buy-to-let landlords, second- or non-resident holiday-home buyers and anyone with a beneficial interest in a company buying residential premises.

Couple this with Alderney’s help-to-buy initiative proposed by the island’s youngest elected member, Rhys Jenkins, who suggested helping first-time buyers by allowing them to pay legal fees and duties in instalments, thereby spreading some of the costs without burdening taxpayers. His scheme could be extended in Guernsey to any buyer, bearing in mind that the average house price is currently £573,155. Stamp duty payable on that amounts to a whopping £17,801. Payments could be made over a two- to 10-year period and the debt registered against the property.

The same formula could be used if a reinstated Homes for Workers Loans scheme was extended to any prospective owner/occupier needing help to save for a deposit on a house purchase, the States taking a second registered charge on the property behind the mortgage provider. These are all small changes that make a big difference when every penny counts.

All this and I haven’t even mentioned rental properties. More about that next week.