A department by department overview of the Guernsey market in 2012
Local Market
Guernsey’s local property market is still proving to be a worthwhile and safe investment, although it is fair to say that activity levels are quieter than in past years.
If you look at bare statistics, then these suggest that the average price of local market properties sold has risen sharply. However, there is strong evidence to suggest that the total number of sales by the end of this year will be down on last year and we believe this, coupled with a few strong sales at the very top end of the market, is causing the average price to appear higher than our own market experience suggests.
It is fair to say that there remains a shortage of properties in the first time buyers’ sector and beyond, with very little available to buy up to £400,000. Investors are still keen to find a safe haven for their money that also provides a “greater than inflation” return and property still seems to be a good long term option in this regard.
We have said before that owner occupiers who might want to move up the property ladder are finding it tough to borrow more money, particularly when they have insufficient equity or savings to make a major move upwards. Whilst there seems to be a greater number of mortgage products on the market now than in recent times, there is little evidence to suggest that Banks are actually willing to relax their lending criteria, with anecdotal reports indicating that buyers are being forced to jump through ever increasing hoops to satisfy requirements.
At the end of 2011, we reported:
“2012 will, we believe, be a much harder marketplace”…”There is undoubtedly uncertainty and nervousness as to where the year is going to take us with such big issues globally and locally – in the case of Guernsey, we have 0-10 tax decisions to make; Government elections; LCVR challenges; and of course the population review to overcome, all against the backdrop of bigger, economic issues which are beyond our control”
Some of these issues have been resolved, albeit far from satisfactorily in some cases. We still remain at the behest of the global picture and nothing we have seen so far would suggest that 2013 is going to be any different to 2012 – a year when vendors found best success by employing honest and proactive estate agents who refused to deliver false promises but instead worked tirelessly against a backdrop of a realistic understanding of the market to achieve the best possible results for their clients.
In 2012 Swoffers was responsible for one in every four property sales. We continued to dominate the Open Market, maintained our very strong share of the Local Market and led the way in Lettings and Management. There is no substitute for experience.
Open Market
The market in 2012 has shown signs of recovery and there is plenty to look forward to in 2013 says Managing Director, Matthew Henry
‘I am proud to say that with 40 years of experience behind us Swoffers remains the market leader when it comes to selling Open Market homes. In 2012 we maintained our stunning record confirming our dominance when it comes to selling these properties having secured over 60% of the market by value’ says Managing Director, Matthew Henry.
The market in 2012 was a trying one but Swoffers still managed to carry out sales from £600,000 to £5,000,000 ranging from modest terraced homes to luxury apartments and superb residences nestling in acres of land. It is heartening to note that after a poor showing for sales in 2011 the number sold in the whole marketplace in 2012 exceeded the previous year’s number by 25% and was helped by Vendors who showed a level of flexibility on price. Those sold by us included a number of ‘Confidential Instructions’, a medium which many of our Vendors have come to embrace as a low level way of selling their homes with the minimum of fuss.
Some of the sales carried out this year have been to people who, when they first moved to Guernsey, chose to rent for a year or two before committing to a purchase. Having lived in the island they have seen first hand what a great place it is making them keen to settle down in a home of their own. With our own in-house, well established, Open Market Rentals department we have been able to offer clients the chance to move seamlessly from their original rental homes to a sale property whilst continuing to deal with people to whom they have become accustomed.
Matthew Henry remarks ‘Guernsey has not remained immune from the economic issues affecting the world outside but it has perhaps fared better than most. It still remains a special place to live and its benefits continue to be attractive to those thinking of making a move to our shores.’
He goes on to say ‘the island may be small but big decisions have been made over the years to ensure that we have kept pace with the requirements of the 21st century. In recent years our hospital, medical specialist centres and a number of schools have been re-built or substantially upgraded and new offices have sprung up around us. In 2012 work started on renewing our airport runway to complement our new airport buildings. I believe that all of these things plus a tax cap, 20% flat rate income tax, no VAT, Capitals Gains Tax or Inheritance Tax helps us to continue to be attractive to those contemplating a move from the UK or beyond.’
To add to the wonderful array of properties already available on the Open Market, next year will see the launch of two developments of luxury apartments, one in an iconic Town building and the other on the island’s west coast each of which will provide buyers with an even greater choice when it comes to lateral living. As always, our clients will be the first to find out about them
In their 40 year history, Swoffers has always been at the forefront when it comes to innovation, in fact, we were the first local agency to have its own website and 2013 will be no exception. Mr Henry says ‘the next 12 months will see substantially increased advertising, the launch of the island’s most innovative property website and Smartphone app and monthly bulletins from Swoffers TV. We believe that no other agent can offer such a level of varied exposure when it comes to selling houses. It should be an exciting 2013’
Rentals
2012 has been another interesting year in Guernsey’s rental market.
With concern about fewer licence holders coming to the Island it was thought that there might be a reduction in the number of potential tenants in the marketplace however, in reality, the number of properties being rented on both open and local markets seems to be broadly the same as in previous years. This is partly due to the difficulty some people have been experiencing raising funds to enable them to purchase a home leaving renting to be a secondary option but it is also because canny landlords have in many cases refrained from imposing rent increases. All of this has meant good news for tenants who have enjoyed a period of wider choice often at realistic rental prices.
Investors have continued to be frustrated by the low returns on their money from the banks but have still seen investment in the property market as a good option. They have been buying not only modern apartments but family houses, an area that traditionally has been less well supplied in the past. Both types have let well in 2012 with rental yields remaining level and most investment properties showing a 3% to 5 % gross yield.
There has been a constant demand on the local market for properties priced at the lower to middle price range and similarly open market homes have also continued to rent well in this same section of the market.
Many landlords have opted for full management services this year and we feel that this trend will continue. It is not only cost effective but it takes the hassle out of looking after your property and gives comfort to the landlord and tenant who can both call on the experience of our professional Swoffers Management Team. Having a competent, dedicated, reliable property manager looking after your assets really does pay dividends.
Swoffers offer a full and comprehensive management and lettings service. We make a clear distinction between each of these with dedicated teams to serve each section including a full team of property managers. During late 2012 we were delighted to welcome a new member of staff to our property management team, Sam Rowe. He brings experience and knowledge and will help strengthen our team and continue to maintain and improve the quality of our service.
