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Housing Prices Roaring Ahead In The Channel Islands

by Robert Lee,, London

15 December 2006

Data released by the States of Guernsey and the States of Jersey shows that the volume of housing transactions on both Jersey and Guernsey rose significantly in the third quarter of 2006, with house prices also moving ahead decisively, compared to the position both one year ago and at the end of June 2006.

On Guernsey, the quarterly average house price figure rose to nearly £323,000 by the end of September compared to just under £312,000 at the end of June, an £11,000 increase. This is the highest figure on record, just beating the quarterly average of £319,000 at the end of March 2006.

Local market transaction numbers rose considerably to 279, up from 249 during the second quarter of 2006. Again, this is the highest quarterly average figure on record.

The pattern of prices on Jersey so far this year has exceeded those on Guernsey, with the average price now some 6% higher after just 9 months at £372,000. Over the 12 months to the end of September, the average has risen by 8%. The volume of transactions on Jersey was similar to the previous quarter at 282 and continues the higher trend of activity started in 2006.

Within these figures, the price of a two bedroom flat on Jersey has risen from £243,000 to £259,000 and for three bedroom houses, one of the largest categories on the market, the rise has been from £364,000 to £398,000.

Nigel Pascoe, Director of Lending for Skipton Guernsey and Skipton International, the lending specialists commented, “This steep jump in retail values may come as a shock to some. Inevitably, some categories of housing have proved to be in higher demand, but overall, we have seen a very active market so far this year, with transaction volumes and values both clearly higher on Guernsey and Jersey.

Turning to the final quarter of 2006, Nigel Pascoe commented, “These figures obviously do not take into account the recent rise in UK Base Rates and the effect this has had, and will continue to have, on mortgage rates. We would expect to see volumes slip, as real costs have now risen, but with such a vibrant market, it may be too soon to forecast such a trend.”

Skipton Guernsey Limited (SGL) is a wholly owned 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.

Taken together, Jersey and Guernsey are home to nearly US$500m of bank and investment fund assets. There is great pressure on the housing market in both islands from existing and incoming wealthy individuals.

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