States plans to penalise inactive developers

As young people in Guernsey struggle taking their first steps onto the property ladder, the Committee for Housing is looking to penalise developers that sit on land without building homes in an effort to encourage building and reduce prices.

Builder Sheridan Bourgaize said he had always planned to buy a home in Guernsey, but with prices and the cost of living increasing he had changed his mind.

"A lot of the younger generation is about to move off island in all honesty," he said and blamed the high cost of property.

Property prices have gone up by more than 52% in the last decade, with the average house costing £608,844, while rents have risen by 65% to on average £2,138 per month.

The affordability ratio, which measures the purchase-price-to-earnings ratio, now stands at 14.1 times earnings.

Last year a report from the Guernsey Community Foundation said: "Concerns about rising living costs and difficulties finding somewhere affordable to live are forcing the island's residents, especially young families, to move away, or to plan to move away.

"Even though they want to stay, they don't see a future here."

The Committee for Housing has blamed a lack of supply in the market for the high prices and their sharp increase in recent years.

During rush hour in St Peter Port I spoke to people at the Weighbridge including Matt Horton, a 33-year-old jeweller, who said the property market was difficult for young people.

"It's extremely difficult and you need a leg up really to get anywhere on the island," he added.

Lily Le Maitre, 19, said she currently lives at home with her parents "but I would like to move out in the future, but it is quite expensive".

"The whole saving and everything. It's quite a lot. I'll probably rent to start off with, but I would like to buy in the future," she said.

"I'm going to have a positive mindset and I think I'll get there, eventually."

Clare Bichard said she was lucky as her rental property had a good landlord, but she acknowledged there were people she knew who weren't as lucky: "A lot of people I know are struggling to find places.

"A lot of people with pets are having issues trying to find somewhere that will even allow them.

"It's just far too expensive for everyone at the moment."

Rosie, who works in finance, said: "I've got quite a few friends that are in a situation where they're having to look for housing now and renting is really high, so it's really tough.

"Wages don't really go up in connection with inflation and everything, and with GST now as well that's even less money in your pocket to pay for things, so yeah, it's tough."

In the States last week, as part of debate on unsuccessful proposals from Deputy David Goy to tax unused buildings, Committee for Housing President Steve Williams said in the next 12 months his committee could start penalising landowners who have planning permission but do not start building.

He said it could come in the form of a higher rate of Tax on Real Property.

Deputy Williams said: "We just need more supply and we need it on all fronts. It's not just about the government putting money in on affordable housing, we also want the private sector doing their bit."

He confirmed that in the next few months his committee would be looking to access a £150m loan which was agreed by deputies in the last term, but hasn't been taken out, with the intention to use that money for new social housing.

The committee is expected to publish a policy letter on the issue in December for debate in January.

Figures from the States showed last year the number of vacant homes had risen to 183, which is 22 more than in 2024 and comprises 0.7% of the island's housing stock.

Simon Holland, from developer Hillstone, said he was against the move as he believed it would be unfair as it could punish developers who were unable, rather than unwilling, to proceed with building work.

"If I was to obtain planning consent for a scheme that was viable at submission, but not viable by the time the States had approved it, would it be fair to tax me on not building the scheme out? I would say not.

"If developers have approval for a viable housing scheme and the market is strong and they have the resources, they will build the houses."

In the last political term the States zero-rated a planning rule that meant developers had to make a portion of their projects affordable housing, after people in the industry complained that it had stalled housebuilding.

Despite this work on new homes remains sluggish, with the most recent States figures showing last year there were 62 new properties added to the market.

That figure has steadily declined in recent years with 155 in 2021, 125 in 2022, 94 in 2023 and 94 in 2023.

Holland said he does not have a lot of faith in the island's economy at the moment and believed that was a view shared amongst developers and had contributed to the lack of housebuilding.

Policy and Resources' Treasury Lead Charles Parkinson predicted 0.5% growth in GDP next year and admitted recent years had seen sluggish growth despite a lack of publicly available stats.

Holland warned there was an over-inflated view of the kind of profits made by developers in Guernsey.

"There is an overly glorified view of property development profits. The reality is that it's a difficult industry to make a profit from."

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