Home ownership still out of reach for many

Thursday 13 March 2014

There is mixed news for home buyers in the latest Jersey Housing Affordability survey.

The annual index shows that affordability has slightly worsened since last year, meaning overall it was less affordable for working individuals and families to purchase a property in 2013. However, the figure reflects a reduction in the number of cheaper one bedroom properties on the market, and in fact two-, three-, and four-bed homes have become slightly more affordable.

It is still very expensive to purchase a property in Jersey with almost half of working households unable to afford to service a mortgage payment on a lower price property (£275,000), but last year was the first in which a working household with a mean net income (£54,000) was able to afford the purchase price of a median priced two-bedroom house since at least 2002.

While the trend for two-, three- and four-bed houses to become more affordable is good news, in 2013 you still needed a household income of more than £87,000 to be able to afford an average priced three-bed house (£445,000).

During 2011 and 2012 there were a lot of lower priced one-bed flats on the market, which helped make the starter homes more affordable. However in 2013 that supply was limited.

Housing Minister, Deputy Andrew Green said he is hoping to build a further 600 new homes under the Island plan, many of which will be one and two bed properties: “We can’t do anything more until we know if we have the sites we want.”

He also wants to make changes to the way social housing is sold, saying: “We are hoping to change the law so that tenants who buy will have to sell it so that it remains affordable. So if you had a 40% subsidy when you bought it, you would have to sell it with that subsidy intact, although the price will reflect the increase in value. That way the affordability is passed on.”

The survey again reflected previous trends that the households in most housing stress, ie having to pay more than the recommended 30% of their gross income on housing costs, were those in the private rental and unqualified rental sectors.