Steve Williams: Building a better tomorrow

It seems that most people in the island accept that there is a housing shortage. In fact, a recent Future Guernsey survey placed housing at the top of the list of islanders’ priorities.

It’s easy to point the finger in one direction or another, but the question of how we got here doesn’t have one simple answer. Therefore, any plan to solve this crisis will have to address the myriad challenges the construction industry – and, by proxy, homeowners – currently face.

First, let’s rewind a little. It’s worth remembering that between 2014 and 2019 the housing market in Guernsey was very subdued. House prices dipped and did not recover to the 2014 average until 2020. During 2016 and 2017 our population also reduced. However, since the end of the Covid lockdown in 2020, the housing market has become very heated, and of course it takes several years to go through the process of building enough new homes to meet that demand.

Post-Covid we found the cost of building materials increased dramatically due to high demand worldwide, factories taking time to gear up, instability caused by the war in Ukraine and a UK mini-budget which exacerbated the Bank of England interest rate increases, making borrowing money to build a lot more expensive. All of these external factors – and more – collided to make the building of homes far more challenging. Builders were exposed to greater financial risks, and we even saw some long-standing contractors cease trading, both here and in Jersey.

Covid also saw us spending more time in our homes, leading to a ‘move or improve’ mentality. Contractors were suddenly flooded with house extensions and general house improvements.

Working with Future Guernsey, I have been a member of a policy working group dedicated to shaping and bringing forward policies to tackle our current housing shortage. This group is made up of local professionals with distinct and detailed knowledge of Guernsey’s housing market, including a developer, estate agent, deputy, charity funder, mortgage broker, and me – the former CEO of the Guernsey Housing Association.

Together, we have shared our experiences to understand truly the issues regarding housing in Guernsey, so that we can create meaningful plans that will get to the root of what we need to do to house our community adequately.

Through our discussions, it has become increasing clear that ‘boots on the ground’ is an issue. The number of experienced builders and tradespeople working locally reduced significantly post-Covid. Many reconsidered their work/life balance, swathes of overseas workers returned home, and post-Brexit regulations and tax changes mean that returning or new workers from Europe find it’s much harder financially to come back to Guernsey. All of those forces together, in a short space of time, created a significant contraction in Guernsey’s building workforce.

At the same time as the workforce has been rocked, demand has rocketed. We want and need developers and general builders to be constructing more homes, but there are many variables, including suitable land availability, timely decisions and flexibility within the Development & Planning Authority, availability of funding, and sufficient risk appetite, to name a few.

It is with this in mind that the Future Guernsey housing policy group has created a set of policies as part of the larger manifesto, which we hope candidates in the upcoming election will support. It is based on local insight, experience and collaboration and, we believe, is a realistic and actionable route forward out of the housing crisis we currently face.

For first-time buyers, we have drafted policy to incentivise developers by reducing the tax on profits to 10% on properties offered to the market at less than £600,000. We are also proposing a Guernsey Property Savings Account for first-time buyers to save up to £60,000 tax-free towards the purchase of their first property or a rental deposit. We also believe that first-time buyers can be helped by scrapping document duty for both purchasers and developers of new properties sold for less than £600,000.

To build more homes our proposals take a sticks-and-carrots approach, empowering developers to build more affordable houses for first-time buyers by creating a new intermediate category of affordable housing, using planning covenants to lock in a 30% discount on market value. For those sitting on undeveloped land, there will be penalties, as they will slowly see the developable area shrink if they do not get on and begin building.

We believe that there is currently too much dependence on a small number of very large sites, particularly in the Vale and St Sampson’s, which are held up requiring either expensive sea flood defences, major road construction or upgrades to services. Our policy calls for planners to zone more small, brownfield sites spread around the main and local centres, as these would have fewer technical hold-ups and the traffic would have less impact on neighbours. Small- and medium-sized contractors would also be able to lead in developing smaller sites.

To help encourage development of brownfield sites across the board, we would also trial lower waste disposal fees, as the cost of clearing tonnes of contaminated earth from sites can often be a barrier to development, and specifically to developing affordable homes.

To assist the rental market our policy supports the building of more private rented apartments by lowering taxes for ‘build to rent’ for the next five years. We also support proportionate legal rights for tenants and landlords and tax incentives for private landlords to invest in improving their properties.

To help building capacity our policy supports increasing the use of temporary accommodation on building sites for workers, with appropriate controls, and fast-tracking work permits for short-term workers. Future Guernsey’s housing policy would complement and overlap with its education policy to encourage more local people to work in construction by expanding the apprenticeship scheme at The Guernsey Institute, including a design, engineering and construction course aimed at training up new architects, quantity surveyors, engineers and other building professionals.

We believe much can be achieved by speeding up planning applications on sites of multiple properties. We would support the creation of a planning role, funded by additional fees, as a contact to track where an application is, and where it may be held up. This would lead to greater transparency in assessing the performance of the DPA and whether it is adequately resourced.

These are a number of short-term levers we can pull. Long term, we would seek to support the maintenance of a steady flow of new homes with a policy proactively changing the use of existing vacant buildings, where required. We would support plans to encourage down-sizing to free up family properties and we would consider derelict property taxes.

Importantly, committing to a housing policy wholesale would allow the States not only to address our short-term needs, but also consider the long term, including contingency plans for dramatic future changes in housing demand.

Much has been said regarding the issues. Now is the time for solutions in the shape of clear, realistic, deliverable and robust policies, built by a team with decades of experience in the island’s housing industry.

We truly can build a better tomorrow, if we work together today.