Guernsey’s rental market continues to come under increasing strain as prices continue to soar. These proposals have sent landlords up in arms — and rightly so. As of June, the average private rental property in Guernsey is now £2,075 per month. That’s a 0.3% increase from last quarter and a robust 5.3% jump over the last year. In just the last five years, rental prices have increased by a shocking 50.8%.
Jeff Guilbert, the chair of Guernsey’s private landlords’ association, highlighted the concerning direction of travel for landlords exiting the sector. He testified that four to six of his landlords leave the market every month. He linked this trend to financial pressures worsened by government policies.
“We are haemorrhaging landlords like there is no tomorrow,” – Jeff Guilbert
With Vice President Lindsay de Sausmarez at the helm, this P&R committee goes above and beyond. At their core, they proposed new measures to relieve some of these pressures. One of these measures is a proposal to change document duty rates to make it easier for landlords to purchase properties. P&R recommended against the introduction of an extra rate of Document Duty on non-primary residence transactions. On top of this, they are going to further squeeze mortgage interest relief, cutting it from £3,500 to £2,500.
Guilbert pushed back on this notion. He said removing the tax relief on mortgage interest will force landlords to sell, creating an “exodus” that will lead to a surge in rent prices.
“It is a killer, an absolute killer. In a lot of cases, your rental is swallowed up by just the interest,” – Jeff Guilbert
Andy Sloan, President of the Scrutiny Management Committee stood firm in P&R’s budget strategy, calling the approach realistic. He agrees with the cash limits that have been proposed to each committee, viewing them as reality checks due to the current financial situation.
Local industry leader Denise McGahy, owner of Denise McGahy Consulting, is particularly disheartened. She says she’d like to see policies that freeze property tax rates for leased municipal or commercial real estate. She called for greater tax breaks for properties that were rented out, as opposed to those that remained empty.
“Something to encourage landlords in town to fill their buildings rather than let them sit empty, as currently there is no real incentive,” – Denise McGahy
Boley Smillie, Chief Executive of the States of Guernsey, is on mission to find £4 million in savings for next year. This seems to be a tall order given that the budgets of these committees have increased by £12 million, in real terms.
As rental prices continue to increase and the possibility of new policies comes to a head, Guernsey’s rental future hangs in the balance. Housing providers have increasing pressures that could drastically change the face of rental stock across the commonwealth.
