Price of housing must come down

Guernsey, with its relaxed and secure way of life plus easy taxation has attracted a substantial number of wealthy folk to purchase the available open market properties. Add the similar number of locals who have benefited substantially from the finance sector opportunities and we have a very large pot of capital looking for somewhere to be invested.

Property in a location of scarce space has always been an excellent hedge against inflation and so it has proved here. Residents – local and newcomers – plus overseas investors have paid handsomely for local homes and business properties that give excellent rental income and capital gain – much better than the pitiful interest banks can offer and without the spiralling risks of equities.

So the Guernsey property market has rocketed – not enough of it and too much money.

If the problem is to be resolved, all property owners will have to take a knock to some degree.

Here is a suggestion:

First resolve the worker issue: allow (even assist) the construction of quality lodging houses for the many short-term but skilled workers required for the service industries. Control the quality and rental. This needs immediate action in any case and will take pressure off high-priced open market multi-lettings – bringing them back into the housing market.

Second, tackle the homeowners: Pass a law that prevents any resident from owning more than one home. In this way there is no more exploitation. Where owners are stuck with property, prices would have to fall.

Third, have all properties available to rent, owned and managed by registered companies. This would allow monitoring and rent control. Rents could be restricted to operating and maintenance costs only as identified in audited accounts and could not add a return on capital investment. Property owners would benefit from safe investment and a gentle rise in capital value. This would lower rents substantially and bring many smaller properties to the market for sale.

Please don’t get me wrong – having a substantial pot of wealth in Guernsey has been of enormous benefit – full employment, business start-ups, public investment, etc. – but it has made housing scarce and thus expensive. The price must come down to stop skilled worker emigration.

One last observation. Do not be afraid of Guernsey’s young leaving the island for new and worldwide experiences. They will return with a host of qualifications and experiences that will benefit our island. It has ever been thus and will continue into the future – just let us borrow young people from elsewhere for those few years while they are away.

I doubt that our present States would have the courage to tackle the problem with such a radical solution, but it is always fun thinking about how things might be.

ROY BISSON

St Martin’s