Guernsey house prices make solid progress

15th November 2010

Local house prices rose on average by 8.2% over the past three months, producing an annual increase of 8.9% for the year to September, according to data released this month by the Guernsey States. On top of this, the healthy jump in sales volumes reported during the period March to June continued, with volumes rising a further 10% over the quarter to end September 2010.

The average price of a house in Guernsey has now risen to £375,250, up from the figure of £346,750, at the end of June 2010. At the same point last year, average values stood at £344,313.

Commenting on the latest Guernsey housing data, Nigel Pascoe, Director of Lending for Skipton International, the Guernsey and Jersey mortgage specialists said, "These are very encouraging figures which build on the good growth figures we saw last quarter. Buyers are now more confident and with 100% mortgages available, sellers are feeling more optimistic too. As a result, we seem to have left the weak market of two years ago behind"

There were a total of 250 transactions in the period, consisting of 235 local market and 15 open market sales. The local market figure is significantly higher than at the same time last year and the second highest figure since the start of 2008. The proportion of apartment transactions again fell back slightly to 20%, whilst the proportion of house sales has risen to a figure of 80%. The average value of open market transactions jumped considerably during the quarter, up over 54% to £1, 235,000 from £798,000 at the end of June, although this data needs to be treated with caution, as the sample size is small. Nevertheless, of these 15 transactions, 11 were for over £1 million in value, a doubling of the number for June.

Nigel Pascoe adds, "The trend towards a higher proportion of house sales and correspondingly lower numbers of apartment sales has continued. We seem to have reached a stage now where the makeup of sales in the market is broadly in line with the long term historic average, which is a further indicator that the market is returning to a more normal footing."

In the UK as a whole, according to the UK Land Registry, over the year to September 2010, prices rose on average by just 5.2%, with the monthly fall of 0.2% recorded, the first fall for six months. The picture for UK prices in general is now very mixed, with some evidence suggesting the recent mini-boom may have run its course, as the latest annual rise is the smallest figure seen since December 2009. In London, the average prices fell during the month by 0.6%, giving an annual rise of 8.8%, down just over 1% of the position at the end of the last quarter.

Nigel Pascoe ends, "We are now cautiously optimistic that the Guernsey property market is entering a new, more positive phase, with both volumes and prices advancing. There is a range of mortgage products in the market for all classes of buyer to choose from, including our 100% loans and our "no mortgage fee" offer for applications started before the end of November. Realistically, we must still expect some volatility over the next few months as the UK economy continues to rebalance and as the widely publicised public spending cuts take effect.

Our 2 Year fixed rate mortgage priced from 3.29% remains extremely popular both with buyers and those looking to remortgage, as does our 5 year product from 4.19%. Our commitment to provide a truly personal service and to ensure our borrowers have the right product for their personal circumstances is as vital as ever in this market."