House Prices Continue Their Climb Offshore

by Carla Johnson, Investors Offshore, London

19 March 2007

Housing specialist Skipton reports that average house prices have moved forward in both Jersey and Guernsey, with prices in Guernsey now 11% higher than at the end of 2005, whilst in Jersey, the rise was a healthy but more modest 6.5% against the previous year.

Nigel Pascoe, Director of Lending for Skipton Guernsey and Skipton International, the lending specialists commented, “The data presents a mixed picture, but underlines the importance of looking at longer term annual trends, as one quarter’s data can seem out of step. Annually, on both Guernsey and Jersey, prices have been rising at a steady rate. However, there has now been two UK Base Rate rises since August last year and this is bound to have had an effect on both transaction volumes and average prices. We will need to wait until at least April this year before we can see what effect the last UK base rate rise in January will have on the traditionally buoyant Spring buying season this year.“

Average prices in Guernsey now stand at GBP310,650 in the local market, whilst in Jersey the average house price now stands at GBP360,000. Whilst not directly comparable, the two figures give a relative picture of prices on the two islands.

As expected, in Guernsey, local market transaction numbers fell back slightly to 269 from the quarter 3 adjusted peak of 293, which at the time was the highest quarterly figure since 2002.

In Jersey, 274 properties were reported sold, compared to 281 in quarter 3 and 334 in quarter 2, which was a record high for the past five years.

Annually, the rise of 6.5% in Jersey compares well with the figures for 2004 to 2005, when the rise was just 2.7%. In Guernsey, the rate of rise has been more pronounced, with average prices doubling in the period from the start of 2000 to the present.

The Guernsey and Jersey data reveals some interesting facts when set in the context of the UK as a whole. Local market prices in Guernsey and Jersey average prices are now higher than both the London average of GBP296,000 and the South West average figure of GBP213,000

Turning to the next few months, Nigel Pascoe commented, “Rising rates often focus people’s minds on their mortgage costs. So for some, it is a good time to consider fixing their interest rate, so they can look ahead with confidence knowing their mortgage costs will not rise. This is a very personal decision, but here at Skipton Guernsey, we pride ourselves on the fact that we take the time to ensure each buyer understands the loan they have and that it is the right loan for them.”

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.

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