Press Office
LOCAL AND OPEN MARKETS IN GUERNSEY BOTH SHOWING BUOYANT HOUSE PRICES
As house price speculation in the UK reaches fever pitch in the first quarter of 2005, it pays to understand historic price movements and the underlying trends involved in order to be able to negotiate a way through the current uncertainty. Figures released by Skipton Guernsey Ltd (SGL), one of Guernsey’s leading mortgage and savings institutions, underline the solid growth in property prices on the Island, both for the local and open markets since 2000 and enable the company to look at the broader picture when advising clients.
Following analysis of data released by the States of Guernsey on house price trends, Nigel Pascoe, Director of Lending at SGL commented, “Whilst we have probably all expected to see house prices rise locally, it is the nature of those rises which may take some by surprise.”
The Skipton Guernsey analysis of prices looked at both the Open Market and the Local Market. Data supplied by the States of Guernsey does not include the top or bottom 2.5% of transactions by price, so “extreme” transactions” do not impact upon the base data.
Since the new Millennium, prices in the Open Market have risen by 68% to the end of Q2, 2004, the most recent period for which data is available. This outstrips the average rise of local property prices, which stands at 60% over the same period.
Nigel Pascoe adds, “It is only when we start to look how that figure of 60% is made up, that some surprises are in store.”
The largest rise in local market prices, nearly 80% stands in the middle quartile (quarter of the data). Put another way, if the range of house prices is divided into four segments, the highest rise has been in the second lowest priced of those segments. Price rises amongst the most expensive section of the local market in contrast stand at just 37% over the period, with the cheapest house sector on Guernsey having the second highest rate of price inflation at 73%.
Nigel Pascoe explains, “Most of the rise has therefore been at the cheaper end of the market, so householders are now looking at significant paper gains. In relative terms, this should allow them to trade up to larger homes more easily, as the rise in this sector has been so much more modest.“
The picture for last year is likely to emerge as more complex, as the current data only runs to the end of June 2004. Although the data will reflect at least in part the first three UK Base Rate rises since 2003, it will not fully take into account rises in June and August 2004. Nigel Pascoe comments, “Data released by other organisations tracking the UK market in general suggests that it was following these last two rises that the rate of growth and volume of transactions in the main UK market started to slow significantly. However, demand for property in Guernsey is still strong”
The additional data needed to allow a fuller analysis will not now be available until later this year, but in the meantime Guernsey homeowners can rest assured that, with rises in value of between nearly 37% and 80% during a period when the UK FT100 index has fallen by around 30%, theirs is a solid investment which holds its own.
Clients interested in knowing more can visit www.skiptonguernsey.com or call +44 (0) 1481 712279.
For further information on Skipton Guernsey please contact:
Guy Stephenson/Deborah Kent
Nacelle Limited
Tel: +44 (0)20 8333 9125
E-mail: info@nacelle.co.uk
Editor's Notes
Skipton Guernsey Limited (SGL) is a wholly owned subsidiary of Skipton Building Society. Deposits made with SGL are not covered by the Financial Services Compensation Scheme established under the Financial Services and Markets Act 2000. Skipton Building Society, established since 1853, has given an undertaking agreeing to discharge the liabilities of SGL in so far as SGL is unable to discharge them out of its own assets and whilst SGL remains a subsidiary of Skipton Building Society. SGL is licensed under the Banking Supervision (Bailiwick of Guernsey) Law 1994, as amended and conducts business only in Guernsey; it is not authorised to accept deposits elsewhere. Copies of the latest audited accounts are available on request.
