March/April 2015 businesslife.co 23

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property

22 businesslife.co March/April 2015

In the build up to the Scottish referendum, estate agents at livingroom suddenly noticed they were receiving additional enquiries for their Guernsey properties from people in Scotland. “it doesn’t take much to shake people, for them to be unhappy and say ‘You know what? i’d prefer to

live somewhere that’s a bit more stable’,” explains Richard hardie, director of livingroom.

the Channel islands are an appealing prospect to many who are looking for a new home. the Candy GPS Autumn Report 2014 identified Guernsey and Jersey as being in the top five islands in the world where property prices have remained resilient throughout the global economic crisis. the report, produced by Candy & Candy, Savills World Research and deutsche Asset & Wealth Management, also put the Channel islands at number three in its list for real estate investment, noting the islands’ appeal to high-net-worth individuals (hnWis) who are looking to relocate.

“We aren’t the cheapest in terms of tax, but we do offer a lifestyle that families are now putting more and more emphasis on,” says bradley Vowden, Partner at estate agents Gaudin & Co in Jersey. “Our language, currency, time zone, security, food, beaches and so on, are allowing us to stand out from our peers and become the island of choice.”

the high end of the property market in both islands, having been flat for the past few years, is showing signs of picking up. in Guernsey, the housing stock is split into the local and Open Market. Anyone can buy both types of property, but local Market properties can only be lived in by qualified residents, or those who hold the right housing license, whereas anyone can live in Open Market residences. As Open Market properties have fewer

Thisisland

high-end property in the Channel islands has always been attractive to those off-island, but

understanding the market is key – whether you’re buying or selling. Rachael Glazier reports

restrictions, and there are only around 1,700 of them, they’re more expensive than those on the local Market.

the median values for Open Market properties in the first three quarters of 2014 were all over £1 million, whereas in 2013 the median value for three of the four quarters was under £1 million. As Carey Olsen Property Partner, Jason Morgan, confirms: “there are signs of a recovery, some green shoots.”

it’s a similar story in Jersey, where hnWis looking to relocate to Jersey must show a sustainable income of £625,000 per year, upon which they pay 20 per cent tax – they are then able to buy properties priced at £1.75 million and above. in the first nine months of 2014, 58 residential properties were sold for more than £1 million, compared with 59 for the whole 2013. “the higher end of the Jersey property market flourished last year where we saw a significant rise in the number of high-net-worth people moving to the island,” says Vowden. he believes this upward trend will continue, saying: “in recent months we’ve seen a number of transactions in excess of £10 million.”

Inward investmentthe trend for hnWis to move to Jersey is one that Kevin lemasney, director of high Value Residency at locate Jersey, has been following carefully: “We’ve had two record years now. 2014 in particular has been an excellent year – better than 2013, and that was the best year we’d had up to then – so we’re confident we’re going to see a strong 2015.”

locate Jersey was set up in 2005 with the aim of attracting greater numbers of hnWis to the island, which it does in part by holding presentations and events in Jersey and abroad. it’s a policy that appears to be working, and

Left: Etoile du Nord, Vazon Bay, Guernsey Above: Royal Terrace, St Peter Port, Guernsey

life

24 businesslife.co March/April 2015 March/April 2015 businesslife.co 25

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Guernsey is hoping to replicate its success. “We’ve got the government signed up to getting a locate Guernsey in the very near future. they’ve said they’ll have something up and running by the end of the year, which is very good news, and something we, as local property professionals, have been championing for a while,” says Morgan.

Vowden reports seeing a shift in investors diversifying their portfolios and moving into property in Jersey. “With interest rates at all-time lows, money has begun to shift out of equity and bond markets, and Jersey property has become that safe haven,” he says. “it’s providing around four or 4.5 per cent gross yields for residential investments with around 7.5 per cent being achieved in the commercial space.”

Law of the land Opportunities for foreign investors to make money through property in the islands are curtailed to a certain extent by their housing and population policies.

in Jersey, hnWis are limited to buying one house, although as lemasney explains, this is not set in stone. “We’re not going to change the policy, but if somebody said ‘i’d like to buy another property and renovate it and let it out’, we would look at the business case and we might allow that,” he says. “What we don’t want though is to have people come in from off-island and have, because of their wealth, an advantage over the local market and accumulate a property portfolio.”

those looking to invest in Jersey can buy additional residential properties by way of share transfer – the purchase of shares of a company relating to a specific property can be done by both residents and non-residents, although these tend to be for apartments rather than houses. Commercial and industrial properties continue to be a good investment across the Channel islands, providing landlords are realistic about rent prices, according to Jo Stoddart, Managing director of Quintessential Relocation Consultants.

Stoddart reports that her recent clients in both islands haven’t been overly enthusiastic about developing properties themselves, which is good news for those who are comfortable with renovating and selling

on quickly. “they want to buy something shiny and new,” she says. “not everybody wants to faff around with planning and architects and designers – they want to be able to move in and get on with their lives.”

that said, insiders agree there are a significant number of properties in need of refurbishment in both Jersey and Guernsey. Carey Olsen’s Morgan believes refurbishing a property in Guernsey makes good sense from a long-term capital investment view. “Guernsey property prices across the board really have only ever gone in one direction, and that i think is particularly the case with the Open Market,” he says. Although he adds: “i think typically the people who are coming to the

The high end of the property market on

both islands, having been flat for the past

few years, is showing signs of picking up

island to buy Open Market properties are coming to buy them to live in them, rather than as investments either for income or capital gain.”

Properties with a sea view are highly desirable and are therefore safe bets as long-term investments in both islands. in 2013, livingroom sold three clifftop sites, two of which have already gone to planning. the buyers are looking to spend millions on the developments, but, as hardie notes, they have secured incredibly unique sites. “if you asked me now to find you a clifftop site i would really struggle. it’s quite a safe investment if you’ve got the nerve to do it.”

Other good investments in Guernsey are the Victorian and Georgian houses, especially those around the million-pound mark that have accounted for a flurry of recent activity.

the rental market in Guernsey tends to be focused around the local Market, and in Jersey on houses not usually the target of hnWis – namely those under £1.75 million. though if the rental market still appeals, Stoddart recommends looking at one- or two-bedroom properties, especially those on the Open Market in Guernsey. “Small Open Market apartments in Guernsey are quite good because not everybody who comes to the island who wants to live on the Open Market has mega bucks.”

As to the future, the high-end property markets in both islands are not only looking in fine fettle but have the considerable support of their governments to capitalise on their appeal to hnWis. As Vowden notes: “i believe there is growth to be seen over the near term and with the work that the government and locate Jersey are continuing to do globally this will stand Jersey in good stead going forward.” n Rachael GlazieR is a freelance financial writer

Finding the deal

To get the best property deal, you need the best advice. Our experts share their insider info.● Don’t rely solely on the internet, says Richard Hardie, Director

of Livingroom estate agents. “Many buyers only contact the agents when they see something online, and in the meantime properties are being sold by the agents on a private collection basis.”

● Keep in touch, says Jo Stoddart, Managing Director of Quintessential Relocation Consultants: “Having a plan with dates and deadlines reassures agents that you aren’t ‘just looking’, and if you keep phoning and expressing interest, you’ll be uppermost in their minds when something new comes to market.”

● If you’re thinking of living in the property, hop on a plane, says Jason Morgan, Property Partner at Carey Olsen. The islands are very different, so make sure you pick the right one.

● Look around the market to see if the asking price is right for the area, says Bradley Vowden, Partner at estate agents Gaudin & Co. “All freehold property transactions are available for the public to access and compare.”

● “If you’re looking for your dream home, don’t try to sell and buy on the same day,” says Vowden, pointing out that if you can rent somewhere short-term this will give you the flexibility to make cash offers as well as the advantage of being in a position to proceed ahead of other potential purchasers.

Top: Le Vauquiedor Manor, St Peter Port, Guernsey Above: a Guernsey granite farmhouse, St Saviour, Guernsey

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