High-end property in the Channel Islands has always been attractive to those off-island, but understanding the market is key – whether you’re buying or selling. Rachael Glazier reports

1. March/April 2015 businesslife.co 23
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property
22 businesslife.co March/April 2015
I
n the build up to the Scottish referendum,
estate agents at Livingroom suddenly noticed
they were receiving additional enquiries for their
Guernsey properties from people in Scotland.
“It doesn’t take much to shake people, for them to
be unhappy and say ‘You know what? I’d prefer to
live somewhere that’s a bit more stable’,” explains Richard
Hardie, Director of Livingroom.
The Channel Islands are an appealing prospect to many
who are looking for a new home. The Candy GPS Autumn
Report 2014 identified Guernsey and Jersey as being in the
top five islands in the world where property prices have
remained resilient throughout the global economic crisis.
The report, produced by Candy & Candy, Savills World
Research and Deutsche Asset & Wealth Management, also
put the Channel Islands at number three in its list for real
estate investment, noting the islands’ appeal to high-net-
worth individuals (HNWIs) who are looking to relocate.
“We aren’t the cheapest in terms of tax, but we do offer
a lifestyle that families are now putting more and more
emphasis on,” says Bradley Vowden, Partner at estate agents
Gaudin & Co in Jersey. “Our language, currency, time
zone, security, food, beaches and so on, are allowing us to
stand out from our peers and become the island of choice.”
The high end of the property market in both islands,
having been flat for the past few years, is showing signs
of picking up. In Guernsey, the housing stock is split into
the Local and Open Market. Anyone can buy both types
of property, but Local Market properties can only be
lived in by qualified residents, or those who hold the
right housing license, whereas anyone can live in Open
Market residences. As Open Market properties have fewer
This
Island
High-end property in the Channel Islands has
always been attractive to those off-island, but
understanding the market is key – whether you’re
buying or selling. Rachael Glazier reports
restrictions, and there are only around 1,700 of them,
they’re more expensive than those on the Local Market.
The median values for Open Market properties in
the first three quarters of 2014 were all over £1 million,
whereas in 2013 the median value for three of the four
quarters was under £1 million. As Carey Olsen Property
Partner, Jason Morgan, confirms: “There are signs
of a recovery, some green shoots.”
It’s a similar story in Jersey, where HNWIs looking
to relocate to Jersey must show a sustainable income
of £625,000 per year, upon which they pay 20 per cent tax
– they are then able to buy properties priced at £1.75 million
and above. In the first nine months of 2014, 58 residential
properties were sold for more than £1 million, compared
with 59 for the whole 2013. “The higher end of the Jersey
property market flourished last year where we saw a
significant rise in the number of high-net-worth people
moving to the island,” says Vowden. He believes this
upward trend will continue, saying: “In recent months
we’ve seen a number of transactions in excess of £10 million.”
Inward investment
The trend for HNWIs to move to Jersey is one that Kevin
Lemasney, Director of High Value Residency at Locate
Jersey, has been following carefully: “We’ve had two record
years now. 2014 in particular has been an excellent year –
better than 2013, and that was the best year we’d had up to
then – so we’re confident we’re going to see a strong 2015.”
Locate Jersey was set up in 2005 with the aim of attracting
greater numbers of HNWIs to the island, which it does
in part by holding presentations and events in Jersey
and abroad. It’s a policy that appears to be working, and
Left: Etoile du
Nord, Vazon Bay,
Guernsey
Above: Royal
Terrace, St Peter
Port, Guernsey
life

2. 24 businesslife.co March/April 2015 March/April 2015 businesslife.co 25
Property
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Guernsey is hoping to replicate its success. “We’ve got the government
signed up to getting a Locate Guernsey in the very near future.
They’ve said they’ll have something up and running by the end of the
year, which is very good news, and something we, as local property
professionals, have been championing for a while,” says Morgan.
Vowden reports seeing a shift in investors diversifying their portfolios
and moving into property in Jersey. “With interest rates at all-time
lows, money has begun to shift out of equity and bond markets, and
Jersey property has become that safe haven,” he says. “It’s providing
around four or 4.5 per cent gross yields for residential investments
with around 7.5 per cent being achieved in the commercial space.”
Law of the land
Opportunities for foreign investors to make money through property
in the islands are curtailed to a certain extent by their housing and
population policies.
In Jersey, HNWIs are limited to buying one house, although as
Lemasney explains, this is not set in stone. “We’re not going to change
the policy, but if somebody said ‘I’d like to buy another property and
renovate it and let it out’, we would look at the business case and we
might allow that,” he says. “What we don’t want though is to have
people come in from off-island and have, because of their wealth, an
advantage over the local market and accumulate a property portfolio.”
Those looking to invest in Jersey can buy additional residential
properties by way of share transfer – the purchase of shares of a
company relating to a specific property can be done by both residents
and non-residents, although these tend to be for apartments rather
than houses. Commercial and industrial properties continue to be
a good investment across the Channel Islands, providing landlords are
realistic about rent prices, according to Jo Stoddart, Managing Director
of Quintessential Relocation Consultants.
Stoddart reports that her recent clients in both islands haven’t been
overly enthusiastic about developing properties themselves, which is
good news for those who are comfortable with renovating and selling
on quickly. “They want to buy something shiny and new,” she says.
“Not everybody wants to faff around with planning and architects and
designers – they want to be able to move in and get on with their lives.”
That said, insiders agree there are a significant number of properties
in need of refurbishment in both Jersey and Guernsey. Carey Olsen’s
Morgan believes refurbishing a property in Guernsey makes good
sense from a long-term capital investment view. “Guernsey property
prices across the board really have only ever gone in one direction,
and that I think is particularly the case with the Open Market,” he says.
Although he adds: “I think typically the people who are coming to the
The high end of the
property market on
both islands, having
been flat for the past
few years, is showing
signs of picking up
island to buy Open Market properties are coming to buy them to live in
them, rather than as investments either for income or capital gain.”
Properties with a sea view are highly desirable and are therefore safe
bets as long-term investments in both islands. In 2013, Livingroom sold
three clifftop sites, two of which have already gone to planning. The
buyers are looking to spend millions on the developments, but, as Hardie
notes, they have secured incredibly unique sites. “If you asked me
now to find you a clifftop site I would really struggle. It’s quite a safe
investment if you’ve got the nerve to do it.”
Other good investments in Guernsey are the Victorian and Georgian
houses, especially those around the million-pound mark that have
accounted for a flurry of recent activity.
The rental market in Guernsey tends to be focused around the
Local Market, and in Jersey on houses not usually the target of HNWIs
– namely those under £1.75 million. Though if the rental market still
appeals, Stoddart recommends looking at one- or two-bedroom
properties, especially those on the Open Market in Guernsey. “Small
Open Market apartments in Guernsey are quite good because not
everybody who comes to the island who wants to live on the Open
Market has mega bucks.”
As to the future, the high-end property markets in both islands are
not only looking in fine fettle but have the considerable support of
their governments to capitalise on their appeal to HNWIs. As Vowden
notes: “I believe there is growth to be seen over the near term and with
the work that the government and Locate Jersey are continuing to do
globally this will stand Jersey in good stead going forward.” n
Rachael Glazier is a freelance financial writer
Finding the deal
To get the best property deal, you need the best advice. Our experts
share their insider info.
● Don’t rely solely on the internet, says Richard Hardie, Director
of Livingroom estate agents. “Many buyers only contact the agents
when they see something online, and in the meantime properties
are being sold by the agents on a private collection basis.”
● Keep in touch, says Jo Stoddart, Managing Director of
Quintessential Relocation Consultants: “Having a plan with dates
and deadlines reassures agents that you aren’t ‘just looking’, and
if you keep phoning and expressing interest, you’ll be uppermost
in their minds when something new comes to market.”
● If you’re thinking of living in the property, hop on a plane, says
Jason Morgan, Property Partner at Carey Olsen. The islands are
very different, so make sure you pick the right one.
● Look around the market to see if the asking price is right for the
area, says Bradley Vowden, Partner at estate agents Gaudin Co.
“All freehold property transactions are available for the public to
access and compare.”
● “If you’re looking for your dream home, don’t try to sell and buy
on the same day,” says Vowden, pointing out that if you can rent
somewhere short-term this will give you the flexibility to make
cash offers as well as the advantage of being in a position to
proceed ahead of other potential purchasers.
Top: Le Vauquiedor Manor, St Peter Port, Guernsey
Above: a Guernsey granite farmhouse, St Saviour, Guernsey
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