Housing supply

“Increasing the supply of housing is essential to bring down prices”

INCREASE in housing supply is key to driving down property prices, which have risen by an average of £1,788 per week in 2021.

The statement came from the Housing Minister, who admitted that the continued rise in house prices, which was laid bare in this week’s House Price Index, could hurt young islanders’ aspirations to own their homes. own property and forcing families to live in inadequate housing.

The average cost of a house has risen to £673,000 in 2021, a 16% increase from £580,000 the previous year, according to the latest report from Statistics Jersey, which covered the last quarter of the last year.

All property types recorded their largest average annual price increase to date.

Last June, MP Russell Labey unveiled his housing action plan – titled Creating Better Homes – which aims to increase the supply of new homes from the current figure of 400 homes a year to more than 700 by 2025.

Deputy Labey said: “Increasing supply is key. It will happen. We have recently secured more public sites for housing and more will follow. Beyond supply, we continue to thoroughly explore all options. It is not easy. Traditionally, when the government intervenes fiscally in the housing market, prices rise. Rent increases were limited to 2%. The last thing we want to do is send this skyrocketing. The challenge is to find balanced measures that will reduce the pressure on the market without leading to unintended consequences.

The average price of a property in the UK at the end of 2021 was £271,000 – around 2½ times less than Jersey’s average of £673,000 – while even the UK’s most expensive region , London, was more than £150,000 less than the Island figure.

For the first time, the average cost of a three-bedroom family home exceeded £800,000 in the third quarter of 2021, meaning an average-income couple in Jersey would need to borrow nine times their combined salary if they deposited £40,000. to pay. By the end of 2021, the average price for a three-bedroom house had risen to £861,000. A four-bedroom house fetched an average price of £1,339,000.

MP Labey added that the continued rise in property prices since 2018 was the result of “high demand outstripping supply in a low interest rate environment”, and added that this situation was “more felt in a small island where people could not travel”. further away where prices are lower”.

“The consequences of high property prices could affect the aspirations of young islanders, if they feel they cannot access the property ladder. Families are also affected by living in the housing they can afford rather than the housing they need or want. This could lead to a reduction in the island’s competitiveness and attractiveness, and the risk that household borrowing will be increasingly exposed to rising interest rates, he said.

“Practical measures are safe and underway. Within the framework of the offer already in progress, we aim to increase the availability of housing with assisted purchase and we strive to facilitate the intensive use of modern construction methods, at competitive prices, more ecological and much less demanding in terms of labor than traditional construction. and much faster to produce.