Well, at least 2023 is done. For the Jersey property industry we will file that under “one to forget”…
So, what does 2024 have in store for us? And more importantly where are the ‘opportunities’ that a market in a certain state of flux presents different players in the property market. Our Residential Director Harry Trower has taken a look.
First time buyers
Things are looking up. 2023 was hard for anyone looking to step onto the property market. Basically a combination of interest rates and property prices effectively priced all first time buyers out of the market. Stepping onto 2024 we already have seen an increase in viewings and properties going under off in the part of the market that was effectively dead last year. Brought on by the base rate remaining the same, prospect of cheaper lending and vendors looking at offers is creating some market activity again.
The government has stepped in and is looking to approve the ‘first step’ scheme (subject to the new chief ministers approval) which is designed to ‘unblock chains’ and will hopefully add some extra activity to the market. Not to mention a new Andium Homes scheme at The Limes which will be selling a block on the assisted purchase scheme.
Finally, new stamp duty relief for first time buyers up to £700K. This was a long time coming but is now up and running.
Opportunities? Combine all the above, if you are mortgage approved and ready to put in offers then start viewing. While prices have not come down the amount some were predicting, vendors are still accepting offers to move onto their next home. It is a case of seeing who will bite.
Investors
Much shorter explanation here…
The government killed the investment market the moment they implemented the extra 3% tax on second homes. It is on them. Also the new landlord licensing will mean more landlords will sell their investments due to the bureaucratic headache.
However, I do have a suggestion. If the government would like to bump up the stamp duty takings then perhaps a stamp duty ‘holiday’ for the 3% and have a look at what happens.
Until then. Unless investors want to pay the additional stamp. Not many opportunities here.
Open Market
I’ll use the term that currently the regular part of the market is ‘chugging along’. There has been an increase in sales and properties going under offer since the tail end of last year. Many buyers though have a property to sell. We are currently looking at a lot of chains and while this was normal a few years ago a lot of vendors’ expectations must be managed as timeframes are no longer short and sharp but more convoluted and timely. Things are happening though and it is very good to see.
Opportunities? Appetite for a project has practically evaporated. With the cost of work still very expensive, many applicants don’t want to purchase a project. However, with a newly finished home fetching a premium, if you have the appetite and funds available to purchase a home that requires work, this is where you will get the most discount. Vendor depending. The £700k-£1m market has such a spread that some vendors will consider offers. Pragmatic vendors will look at the bigger picture and look to secure a deal on their next purchase.
Mortgages
Less about opportunities but more a note. With the base rate hopefully at its peak we have seen a little confidence creeping back in. If you can secure a mortgage, then my advice would be not to fix but to use a base rate tracker that hopefully would only get cheaper over the year. Then when you are comfortable, fix it. While we are seeing rates dropping in the UK that has yet to happen over here. Much to many people’s frustration. It will happen though. Just not as fast as it has in the UK.
Developers
Interestingly, my opinion is that currently there are not many opportunities for developers, unless they can secure a property far below the market rate. This is because the cost of building work, convoluted and drawn out planning process, cost of development finance, and cost of labour has ruined any profit. This is sad as there is a lack of housing being built and developers are the main people who get this done.
Things that I would like to see in 2024
While the above is almost a real time update, below are a few points that I would like to see in 2024:
Regulation of estate agents. We deal with 90% of the population’s largest asset and anyone can start up at any time. Seems ludacris doesn’t it?
A look at the selling/buying process in Jersey. Why applicants and vendors cannot look at ALL the property information prior to instructing lawyers and make an informed decision before incurring costs seems a bit backwards when in most other countries it is standard practice. It causes not only financial issues but also so much stress that could easily be mitigated. The more I think about it the more frustrated I become. Granted ‘it is the way it has always been done’, but again. That is rubbish. It could easily be changed.
Stamp duty holiday for investment purchases. Go on government… I dare you to try it!
As always, if you have any questions or want a free & honest valuation of your property, please contact us.
