By Richard Digard
FEW things tell you more about the heart of a community, I suppose, than how it cares for its citizens. It’s one reason why, in a just published document, the other island has declared: ‘All people living in Guernsey will have access to a range of good quality housing that is affordable, secure, energy efficient and adequate for their needs.’
The problem for me and others with this, however, (apart from why something so fundamental should need stating in the first place) is it’s 50 years too late. Having dickered ineffectually over the decades with the imbalance between demand and supply, we’re just about to go full hair shirt, declare a housing crisis and try to build our way out – up to 114 football fields’-worth of new estates by 2040.
Don’t get me wrong. I’m not trivialising the position here or in Jersey. Housing, lack of it and – especially – the cost of owning or renting frequently has devastating consequences on families, their finances and health, and is one reason why Policy Centre Jersey is investigating its impact on social mobility.
The new Guernsey Housing Plan is actually an impressive piece of work, led by one of our more able politicians, Lindsay De Sausmarez, who also heads up Environment and Infrastructure. It’s also profoundly depressing. The reason is the consultants who had a lot of input in the report say that the broken housing market and the existing demographic changes pose ‘what is an existential challenge for the Bailiwick’.
That’s because, according to advisers arc4, ‘The local “indigenous” population is not replacing itself. This is a developed economy problem. However, the population [in Guernsey] is declining at a slightly faster rate than the UK or EU. While births have exceeded deaths since 2015, the recent average fertility rate of 1.4 births per female is well below the 2.1 births required for a break-even population replacement rate.’
And that outlook, I was surprised to find, is even worse here: a fertility rate of just 1.32 per Jersey woman, and something of a two-decade low. While the solution is, on paper, simple for Guernsey – immigrate more and provide lots of new homes – it’s less so for Jersey. Guernsey’s population grew by just 1.5% over the last ten years while yours was nearly four times that (5.5%). For England and Wales it was 6%, suggesting Jersey’s pretty much reached the immigration limit, at least for a while.
As the Council of Ministers said in its 2022-25 Government Plan: ‘The management of our growing population and the impact on our Island resources must also be addressed.’ Ministers added that they recognised the impact that population and other external factors have had on house prices and affordable housing supply for locals.
That led to £10m being earmarked so that the Jersey States could introduce what was called ‘a new affordable purchase product’ (no, no idea what it means either) during 2022 to help more Islanders own their own homes. Unsurprisingly, that hasn’t happened, so the issue of affordability remains, if anything, even worse.
The other problem is what is actually meant by ‘affordable’. Guernsey’s work has cracked that and we’ll come on to that in a minute. In Jersey’s case, property prices are less of an issue than personal circumstances. Hence the definition here is: ‘Residential accommodation for renting or for purchase by persons who would otherwise have financial difficulties renting or acquiring residential accommodation in the general market.’
On that basis, you currently have 836 people officially recognised as either being in urgent, moderate or low need of decent accommodation. That number is significant because if ministers are serious about helping people onto the property ladder, the proffered £10m is way too low – it amounts to just £11,961 each for everyone on that list. Look at it more widely, and the claimed ‘affordable purchase product’ is equivalent to £205.72 per the existing 48,610 residential buildings there are in the island.
I’d suggest the Jersey approach is struggling in a more meaningful way too. The end of July figures show there are 613 individuals who are either homeless, under notice of eviction, grossly poorly housed or have other pressing needs for better accommodation. Some 41, as I read it, are particularly exposed as they have been referred by the various agencies, presumably because of the risk of harm or abuse.
There are a further 223 individuals who are deemed to be in lowest need and thus unlikely to get much, if any, help and this is particularly disturbing. They’re in this category because it reflects applicants ‘whose current accommodation is unaffordable given their personal circumstances’.
And what happens to people who can’t pay their rent? Exactly, so the best they can look forward to is eviction and moving into a more urgent category where there are already hundreds in front of them.
By contrast, in Guernsey the States are being asked to establish what the affordable price of a house is. And on the advice of their experts, it should be based on the average property purchase price to earnings ratio, which is currently 16.3, and that should fall to between 3.5 and 4.75.
In Jersey’s case, where the median price of a three-bed house was £835,000, that approach would see the ‘affordable’ figure as £136,500 to £185,250 – a substantial difference and one which I’d hazard many people would think unachievable.
I’m paraphrasing a bit here, but the difference in approach between the two islands’ housing crises boils down to this:
Jersey: it doesn’t matter what the cost of property is, if you can’t pay, we’ll help (except the waiting list shows we don’t).
Guernsey: The cost of property is everything and we have to make it cheaper by building way more so that you can afford to buy or rent.
So which is the best approach? Any objective assessment would, I think, conclude that Jersey has in recent years been better and quicker at providing more social housing for sale or rent, has a more coherent and properly funded pipeline to meet future need but hasn’t yet got the affordability problem cracked.
Guernsey, despite the best efforts of the Guernsey Housing Association, is coming to the party late and its ‘solution’ is still theoretical and implies a state-manipulated collapse in residential property prices.
The latest news in Jersey – that the turnover of properties is 42% down – shows how cyclical the market is and that, after all is said and done, £136,500 still isn’t affordable if you can’t raise the funds.
On balance, pitching access to accommodation on the basis of personal circumstances rather than a somewhat arbitrary multiple of earnings (which you might not have) seems fairer. And for those already on the housing ladder, certainly preferable to triggering a market crash.
