Housing

There are two related key housing issues in Jersey – an imbalance of supply and demand and high housing costs. This Brief brings together available data on the structure and operation of the housing market and various policy initiatives.

The housing stock

Chapter 4 of the Report on the Jersey 2021 Census provides a snapshot of housing in Jersey in April 2021. Key points are -

• There were 48,610 private dwellings and 162 communal establishments.
• The number of private dwellings in Jersey increased by 9% (3,912 dwellings) in the 10 years since the 2011 Census (which recorded 44,698 dwellings).
• 4,027 private dwellings were identified as vacant on Census Day, corresponding to a vacant rate of 8.3%. A quarter (26%) were vacant due to being built or renovated, a greater proportion than in 2011 (9%). Second / holiday homes (6%) and properties being between tenants (4%) were the next most cited reasons.
• Excluding those living in communal establishments, 101,188 people were living in 44,583 dwellings in 2021, representing an average of 2.27 persons per dwelling. The figure was 2.79 in 1971 and 2.38 in 2001.
• The breakdown of houses by tenure was -

Owner occupied 54%

Private rented – registered 22%

Private rented - unregistered 10%

Social rented – Andium 10%

Social rented – other 4%

• The breakdown of the housing stock by type of dwelling was –

Detached 25%

Semi-detached 20%

Terraced 10%

Purpose built flat 31%

Flat as part of converted house 11%

Flat in commercial building 2%

Future housing needs

On 20 March 2024 the Government published Household & housing needs projections 2023-2040. The introduction to the report states –

This report has been produced based on the latest population projections produced by Statistics Jersey. Projections for the total number and type of households are provided year by year up to 2040. The changes in household structures seen across the 2011 and 2021 census are used to inform these projections.

It is important to note that the projections are not forecasts and so will differ from the actual future outcomes to a greater or lesser extent. They assume that current trends and behaviour in respect of fertility, mortality, migration and household formation continue forward over the projection period. Changes to these assumptions will impact the results, therefore the findings should be considered an estimate based on recent trends to inform decision making.

The report also uses the change in the numbers and types of households to provide an objective assessment of future housing needs over the projection period and includes breakdowns of the projected change in the numbers, type and size of dwellings. This assessment is based around the existing distribution of property type to households as observed in the 2021 census. It is based solely on the projected demographic change and assumes that the distribution of households to property type / size remains the same as was observed at the time of the census.

The projections are presented as a series of scenarios based on a set level of net migration experienced every year over the projection period. These are:

• -100 net migration: where 100 people leave the Island over and above the number that arrive.

• Net nil migration: where the number of people arriving equals the number of people leaving.

• +325 net migration: where 325 arrive on the Island over and above the number that leave.

• +700 net migration: where 700 arrive on the Island over and above the number that leave.

• +1,000 net migration: where 1,000 arrive on the Island over and above the number that leave.

The housing needs projections are based on the household projections and assume that each projected household will require a unit of accommodation. They are also based solely on the projected demographic change and assumes that the distribution of households to property type / size remains the same as was observed at the time of the census.

The total number of projected units required for both qualified and registered accommodation are summarised in tables which are reproduced below.

Fiscal Policy Panel Housing Market Review

On 16 April 2024 Jersey’s Fiscal Policy Panel published Housing Market Review. This was in response to a request by the Chief Economic Advisor for support in understanding the economic drivers underlying the challenges being experienced in Jersey’s housing market. The report provides a comprehensive description of the structure of the Jersey housing market as well as analysis of housing market problems.

The executive summary of the report is set out in full below -

As with all rich economies, spending on housing is a high proportion of income in Jersey. This, coupled with Jersey’s relatively high income inequality (and lack of land borders) means that market rents and house prices are unaffordable for a considerable proportion of the population.

• Jersey’s housing supply has expanded. The rate of new housing supply in Jersey was higher than the OECD average in 2011, though fell below the average in 2021.
• The housing stock has changed. Growth in housing stock has been concentrated in purpose-built flats, accounting for 75% of the increase in properties from 2011 to 2021.
• Jersey has a lower homeownership rate than the UK. 54% of households own their own properties. This compares to 67% in the UK. This is partly affected by restrictions on who can buy property in Jersey.
• Around 8% of properties are vacant in Jersey. This is surprisingly high given the Island’s small land mass and supply constraints.
• Overcrowding, while a problem for those experiencing it, is not particularly common in Jersey. The same proportion of households are classed as overcrowded (having fewer bedrooms than required by the household) as in England and Wales. However, under occupation, where a household has at least two bedrooms more than required, is less likely in Jersey.
• Access to mortgage finance has Jersey specific features not seen in the UK. There are fewer mortgage providers, and the process for accessing a mortgage is more personal, and lender specific, potentially raising switching costs. Borrowers are likely to face higher mortgage interest rates compared to the UK mortgage market.
• Environmental restrictions in Jersey present hard limits to development.
• Development is restricted outside of the built-up area, which covers 12% of the Island. These restrictions are justified by conservation but represent a constraint on the amount of new housing supply that can be generated.
• The planning system can also create barriers to new housing supply.
• Features of the system, such as third-party appeals and delays in reaching decisions on major applications, create uncertainty over outcomes and act as barriers to bringing new supply forward.
• Housing supply targets are difficult to develop. They are based on estimated future housing demand which is inherently uncertain. They may need to be reviewed when population growth or demographic trends differ from forecasts, as they have done in recent years.
• Affordability is at historically low levels. House and rental prices rose faster than incomes over the 8 years to 2022. An average priced house is equal to more than 13 years of net income for the average household, and this is compounded by recent rises in mortgage rates.
• The rise in prices has many causes. They include a period of global record-low interest rates, rising income growth and demographic change. While these factors supported demand, others have tamped down on supply, including the fall in the rate of home completions from 2012 to 2021 compared to the previous ten years.
• A high-cost housing market can harm any economy. Sustained productivity growth relies on a fluid job market in which the most productive firms can grow by hiring. Even the most successful businesses in Jersey are finding it increasingly difficult to attract and retain staff. This holds back their expansion, with knock on effects for productivity, output and ultimately living standards on the island.
• The Panel’s assumption is for house prices to remain stable in 2024. However, there is a risk that prices may fall in the short-term. Affordability is unlikely to change in 2024 with base interest tariffs not forecast to fall until the middle of the year and inflation outpacing earnings growth. As these factors begin to ease, prices could again increase, particularly without higher rates of supply.

The Report then lists a series of key findings, which are reproduced below -

Jersey’s housing market is not exceptional – many other places face similar problems. But particular groups are struggling. There are several areas that would benefit from further work. These should be prioritised in terms of those that are genuinely holding back new arrivals and young Islanders from accessing housing, since the problems faced by these groups are those most likely to be holding back economic activity on the island.

1. Social housing. High economic inequality and high housing costs increases the need for a portion of the population to access housing at below market rent. Thus, although Jersey’s share of social housing is above the OECD average, focus on delivery of housing below market rent, including key worker accommodation and social housing, would be welcome.

2. Planning. The FPP note that some features of the planning process in Jersey can increase uncertainty of outcomes, such as third-party appeals. The Panel recognises that there are barriers to data collection for the planning department. Greater data, such as on the length of time from registration of application to final decision, would help to ensure the planning process is efficient and low cost for the applicant.

3. Mortgage markets. The Panel notes that some features of the mortgage market in Jersey, such as the low number of lenders, barriers to switching and higher interest rates compared to the UK, are concerning. Further work investigating the impact of the market on interest rates and product choices offered to Islanders would be beneficial. Systematic data should also be collected on housing arrears and repossessions.

4. Tax measures. The Panel welcomes the phasing out of mortgage interest relief for owner occupiers. This area would benefit from further work to ensure wider taxation measures do not skew the balance between owner occupation and rental.

5. Rental markets. Rental data relies on advertised private rental statistics, which do not reflect actual rents. Data collection on the operation of the rental market would inform understanding of rental affordability and how rental yields compare to other investments over time.

6. Residential status. The seasonal labour force is important to Jersey’s economy. There needs to be greater understanding of the changes in the population by residential status and the interaction of this with housing supply, to understand if planned future housing supply is reflective of expected changes in residential status.

7. Residential space standards. Minimum space standards should consider harmonisation with the UK where possible to encourage use of more standardised construction methods such as modular units. These types of construction methods support the efficiency of building by requiring less labour on island. Though, standards are not the only barrier to such methods.

8. Demand measures. Interventions that slow down adjustment of the housing market to changing economic conditions are not desirable.

9. Vacant homes. There is room for improvement in Jersey’s rate of home vacancy. The Panel notes that the Government, through the launch of the Empty Homes Service, is working to identify long-term vacant properties and bring them back into use. Bringing vacant properties back into use is welcome in a supply-constrained area.

10. Distribution of housing. Given the significant increase in the share of flats in the Jersey housing stock over recent years, it is important to monitor the relative supply and price of each type of housing to ensure all needs are met.

Housing costs

Statistics Jersey publishes quarterly reports on housing costs. The most recent report, published on 7 November 2024, was for the third quarter of 2024. Key points from this report were -

• Average house prices in 2024 Q3 were 1.1% lower than in 2024 Q2 and 12.0% lower than a year earlier.
• Average rents in 2024 Q3 were 2.1% lower than in 2024 Q2 and 0.1% lower than a year earlier.
• The turnoverof properties was 12% lower in 2024 Q3 than in 2024 Q2 and 19% higher than a year earlier. These figures must be interpreted with caution due to variation in the number of Royal Court sittings and seasonal variations.
  
  

The following table shows mean prices for 2024 Q3 for different types of unit and the change from 2023 Q3 –

1-bedroom flats £306,000 -15.5%

2-bedroom flats £507,000 -9.1%

2-bedroom houses £618,000 +2.0%

3-bedroom houses £749,000 -11.0%

4-bedroom houses £1,127,000 -19.7%

The most significant figure is the fall in the price of four-bedroom houses of 19.7% in the year to 2024 Q3. However, the relatively small sample sizes mean that all these statistics should be viewed with caution.

The fall in house prices and rents has occurred at a time of high inflation generally. In nominal terms average house prices have fallen by 14.1% since the peak in 2022 Q3. Inflation in that period has been 13.3% so in real terms house prices have fallen by 27.4%. Average rents have fallen by 5.3% since their peak in 2022 Q3 and in real terms by 18.6%.

Although house prices have fallen significantly in real terms, housing affordability, in respect of property purchases, has fallen as a result of the increase in mortgage rates.

The reports no longer includes comparative data for Guernsey and the UK or data on the house price earnings ratio. Relevant data from the 2023 Q4 report are reproduced below –

In 2023 Q4 on a comparable basis average house prices in Jersey were 15.3% higher than in Guernsey. House prices in Guernsey fell by 5% between 2022 Q4 and 2023 Q4 and in the same period turnover fell by 17%. The average house price in Guernsey was similar to that in Jersey until 2015 since when prices in Jersey have increased more rapidly.

On a comparable basis the average house price in Jersey in 2023 Q3 was £636,000, 122% higher than the UK figure of £286,000 and 25% higher than the London figure of £511,000.

The report includes data on the ratio of house prices to earnings. On a comparable basis in 2022 the ratio in Jersey was 14.8, compared with 8.4 in England and 13.9 in London. As a result of the subsequent fall in house prices and increase in earnings the ratio has probably fallen to about 12.8 in Jersey, but it will also have declined in England.

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Developments in the housing market reflect factors external to Jersey and are replicated in the UK and other countries. The Russian invasion of Ukraine and other factors have resulted in a sharp increase in inflation. The annual rate increased from 0.9% in the year to the December 2020, to 12.7% in the year to December 2022, before falling to 3.0% in the year to September 2024. The forecast by the Fiscal Policy Panel is that the rate will average 3.5% in 2024 and 1.7% in 2025.

An essential tool to bring down inflation is interest rates - accordingly in a period of just 18 months the Bank of England base rate increased from 0.1% to 5.25%, before falling to 5.0% on 1 August 2024 and 4.75% on 7 November. This has naturally fed through to mortgage rates. Two-year fixed rate mortgages increased from around 2% at the beginning of 2022 to a peak of 6.0% since when they have fallen back a little.

Higher interest rates combined with a previously overheated housing market in Jersey have led to the reduction in house prices and rents.

The rise in interest rates is impacting most severely on those who have bought housing in the last few years. For a typical mortgagor rolling off a fixed-rate deal in 2024, monthly interest payments will increase by an average of about £300 a month - £3,600 a year - but for a relatively small number of households the figure will be in excess of £10,000 a year.

Priorities

On 9 April 2024 the Council of Ministers published its Proposed Common Strategic Policy 2024 - 2026. This set out 12 priorities for delivery in the next two years. They include –

Provide more affordable homes for Islanders and more confidence for the rented sector.

Related to this are two other priorities -

Deliver a plan to revitalise Town.

Reform the planning service to get Jersey building.

The section on housing is –

Provide more affordable homes for Islanders and more confidence for the rental sector

Nearly half of households in Jersey live in rental accommodation and it is vital we ensure everyone has access to a safe, secure, and affordable home that meets their needs. The rental market plays an important role in helping us to achieve this, but it must be supported by a modern and fit-for purpose legal framework that helps to protect both tenants and landlords.

We will provide more confidence for the rental sector by implementing the new Rented Dwellings Licensing Scheme to ensure that rental homes are maintained to a decent and safe standard. We will introduce a new Residential Tenancy Law that will improve tenancy arrangements for both tenants and landlords. Ministers will be focusing the Government’s development and planning resources on encouraging the building of more affordable homes for Islanders to buy or rent.

Meeting this priority will provide the certainty and protection both renters and landlords need, tackle rent inflation, and – as more social housing supply is provided – make the benefits of social housing accessible to more Islanders. All of this will be driven forward by the Housing Crisis Emergency Taskforce which was established on the first day of this Government’s term.

Vacant properties

On 30 November 2022 the government published a report Action on Vacant Properties. This set out six actions –

• Action 1 – collection of anonymous vacancy data through parish rate declarations in 2023 and progressing a law change to enable this to be collected formally in the future
• Action 2 - set up a community-led reporting mechanism for Islanders to report homes they believe are vacant or in a very poor condition which is harming the environment. This will be supported by the new Empty Homes Service to be established in January 2023
• Action 3 - work in partnership with the Minister for Environment to more proactively manage land condition and make better use of existing homes in the Island
• Action 4 – help His Majesty’s Receiver General to identify vacant and ownerless properties and bring them back into active use
• Action 5 - support States-owned entities in the purchase and redevelopment of vacant properties, whilst encouraging the development of local skills and meeting wider Government objectives for construction innovation and carbon neutrality
• Action 6 - establish an Empty Homes Service to provide advice to Islanders, monitor and analyse demand and policy development, and make referrals to the Regulation Directorate and HM Receiver General.

On 11 October 2023 the Housing Minister published a progress report on the Empty Homes Service. Key points in the report included –

• Since the Service was launched 260 cases have been reported, 29% of the 900 homes estimated to be vacant.
• 100 cases have been reviewed, comprising 132 units.
• 38 homes have been brought back into use, are being marketed or are being renovated.
• 38 of the properties have a listed heritage status.
• 36 of the properties are in such a condition that is causing harm to the environment.
• 20 of the homes are publicly owned.
• In August 2023, 143 advertised properties were vacant or chain-free.

The final section of the report includes the following comment –

The work of the Empty Homes Service in its first six months has demonstrated the complex and often personal nature of homes being left empty for long periods, and that there is no simple or single solution.

In April 2024 the new housing minister Deputy Sam Mézec closed down the scheme on the grounds that it was not producing any results. He said it was not leading to plans being put in place to get empty homes back into use and therefore was not a good use of public time and money.

Rent a room scheme

On 4 January 2023 the Housing Minister announced a tax incentive aimed at encouraging homeowners to let out a room in their house –

Under the Rent A Room Scheme, homeowners can receive tax relief on rent that they receive for letting a bedroom in their own home from 1 January 2023.

The scheme, which is part the Government’s wider programme to address Jersey’s accommodation shortage, enables homeowners to receive tax relief provided that:

• the total gross income does not exceed £10,000
• the room is not rented to a family member
• the room is in the homeowner’s main residence, and is not a self-contained unit; and - the lodger is over 18 or placed in the room by an appropriate organisation if they are under 18.

Residential tenancies

On 14 April 2023 the Minister for Housing and Communities published a consultation paper Improving residential tenancies in Jersey.

In his foreword to the consultation paper, the Minister said –

The Residential Tenancy Law (Jersey) 2011, which came into force in 2013, was an important step forward to provide greater protection for both tenants and landlords in Jersey. Whilst it is important to recognise that Jersey has come a long way, there is still much to do.

The current law does not go far enough to ensure that all tenants and landlords in Jersey have the protections that they need and deserve.

It is essential that comprehensive improvements to residential tenancies, rights and protections are achieved as soon as possible, and that opportunities to improve and simplify legal frameworks are maximised to provide optimal outcomes for both tenants and landlords.

The Minister identified the key areas in the proposals –

Changing the standard forms of tenancy, focusing on the use of open-ended tenancies that can only be ended for specific reasons, meaning that landlords will no longer be able to end a tenancy without good reason and tenants will have greater protection from ‘revenge evictions’.

Introducing and enhancing minimum notice periodsfor ending a tenancy or increasing rents, leading to greater clarity and certainty for both tenants and landlords.

Limiting the amount and frequency of rent increases, so that rents should not be increased more than once per year, and the amount should be capped during tenancies. I will be looking to ensure that such legislative measures do not lead to negative, unintended consequences in the rental market. We must ensure that these changes also protect tenants’ security of tenure and do not compromise a landlord’s ability to realise a stable and fair rental return.

Establishing a new Housing Tribunalthat will consider and resolve a wide range of residential tenancy matters, creating a more accessible route for tenants and landlords to resolve tenancy disputes.

Formalising requirements for social housing provision,including introducing a definition of a ‘social housing provider’ which will be attached to minimum requirements, whilst creating a route for new organisations to become recognised social housing providers.

Increasing the scope of Regulation and Order-making powers, to make sure the Law can be extended further and remains fit-for-purpose over the years ahead.

On 23 April 2024 a ministerial statement gave details of the way forward for the new Residential Tenancy Law, which will be lodged later this year. The law will provide for enhanced security of tenure for tenants. A new type of tenancy will -

• Allow for an initial fixed-term arrangement.
• Offer longer minimum notice periods for long-standing tenants.
• Enable landlords to take swifter action against tenants in serious breach of their tenancy agreement, to protect their properties.
• Ensure there will be a comprehensive set of reasons, in law, to allow landlords to issue notice and reclaim their properties when appropriate.

The other main measures are –

• Rent increases limited to once a year, minimum notice periods for rent reviews being implemented, and protecting tenants from excessive rent increases.
• A Housing Tribunal to provide a fair an accessible way of dealing with disputes.
• Prohibition of inappropriate fees and charges.

Private rented dwellings licensing scheme

On 18 November 2022 the Environment Minister announced his intention to bring forward a licensing scheme for the regulation of private rented dwellings. This aims at ensuring that minimum standards are adhered to and that tenants and their families are living in safe homes. Under the scheme, each rented dwelling would require a licence, with government officers able to withhold or withdraw a licence if a property is deemed to be unsafe. The proposed regulations were published on 5 June 2023 and were approved by the States Assembly on 28 November 2023. The scheme comes into force on 1 May 2024 and from 1 August 2024 it is illegal to let a property without a licence. The details of the scheme and other relevant information are set out on a page Rented dwelling licensing on the government website.

To qualify for a licence rental property must meet minimum standards including –

• An electrical safety report undertaken by a competent engineer.
• An annual gas safety inspection, even if a gas appliance is not connected or in use.
• A smoke detection alarm.
• A carbon monoxide detection alarm.

A copy of the licence and written information explaining how tenants can raise a concern or complaint must be provided to tenants within 28 days. The tenancy agreement has to be in writing and tenants must be provided with a condition report.

Assisted home ownership scheme

On 7 July 2023 the Housing Minister announced that he had raised the household income thresholds for his Assisted Purchase Home Ownership policy, which helps first-time buyers who cannot purchase on the open market without assistance. The new household income limits range from £65,000 a year (one-bedroom flat) up to £135,000 per year (four-bedroom house). The previous income limits ranged from £45,000 up to £90,000. The announcement said that “more potential homebuyers can now qualify for assistance such as Andium Homebuy, an assisted purchase scheme where buyers can purchase a home with a deferred payment of up to 25% of the market value”. The number of properties available under the scheme is limited – currently 12 are listed of which nine are under offer. The website shows that estimated wait times for the scheme range from 1.5 years for two-bedroom properties to three years for four-bedroom properties.

First step assisted home ownership scheme

On 29 February 2024 the first step assisted home ownership scheme was opened. The Government press release stated -

The assisted purchase home ownership scheme, delivered in partnership with Andium Homes, uses £10m of government funding to help eligible Islanders access a contribution of up to 40% towards the purchase of an open-market property.

Buyers will need to provide a 5% deposit towards the purchase and be able to access the maximum lending available to them from one of the scheme’s partnering mortgage lenders. 

Access to social rented housing

The issue of whether housing being built should be “affordable” comes up in political debate. There is the ordinary meaning of affordable but also in the context of the Jersey housing market, “affordable” means homes available from social landlords at 20% below market rent. Access to such homes is through the Affordable Housing Gateway . To qualify applicants must be –

• Medically exempt from working with a need for specific types of housing that cannot be afforded in the private sector, or
• have a family and be in receipt of a relatively low income, or
• are over 30 and in receipt of a relatively low income.

The current income limits for a single applicant range from £38,818 for those with no children to £85,132 for those with three children. For joint applicants the range is from £52,462 to £92,079. For comparison, the mean household income in Jersey is current around £75,000.

It does not follow that being in the Gateway automatically qualifies a person for social housing. This depends on the availability of homes. The Gateway is divided into three bands - urgent need, moderate need and low need. As of 30 June 2023 there were 812 families in the Gateway, 272 being classified as urgent.

On 31 July the Housing Minister published a Roadmap for improving access to social housing in Jersey, which outlines a detailed series of steps to widen access and to improve the way social housing is managed and promoted. The changes will be phased in over the next 15 months. The age of eligibility for people without children will be reduced from 40 to 25. The maximum income thresholds for social housing will be increased from September 2023 to £61,956 a year (single applicant and one child) and to £92,079 a year (joint applicant and three children or more).

Background papers

The following papers contain useful background information.

• Objective Assessment of Housing Need, by the consultants ARC4, January 2019.
• Review of Access to Social Housing in Jersey, by the consultants HQN, April 2019.
• Affordable Housing – Supply and Delivery, by the Environment, Housing and Infrastructure Scrutiny Panel, including a report by its consultants ARK, October 2021.
• Jersey Homelessness Strategy, report by the Jersey Homelessness Strategic Board, November 2020.

Further information

Statistics Jersey has a page on Housing and living statistics.

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