Planning for Homes 2006 Report R 94 2006

1240/5(3157)

WRITTEN QUESTION TO THE MINISTER FOR HOUSING BY DEPUTY G.P. SOUTHERN OF ST. HELIER

ANSWER TO BE TABLED ON TUESDAY, 16th JANUARY 2007

Question

1. O n page43of the report "Planning forHomes2006"(R.94/2006)it states that one of the contributing factors to the risein activity (and prices) in the housing market identified by estate agents is "new j category'(essentialemployee)buyers".How does the Minister reconcile this with his written answeron 5th December 2006 inwhichhe stated that "it is simplynot plausible () to ascribe the increase in house prices to a smallnumber of essential employees"?
2. I n light ofthestatement in the Planning for Homes 2006 report that the average prices for certain 3 bedroom houses are now"more than ten timescurrent average annual earnings" what action, if any, does the Minister intend to take to tackle this situation in a meaningfulway?
3. W ould the Minister inform members whether the purchaseofpropertybynon-residentson a "buy tolet" basis further restricts thesupplyof properties for purchaseby locals and whether such purchasesput additional upwardpressureon prices?

Answer

1. T h e Planning ForHomesdocument makes it clear that "new j category (essential employee)buyers" is only one of five factors that is ascribedbythe agents asbeing a contributory factor to the increased activity in the housing market. The preceding comments in that report refer to"a new foundconfidence follows an upturn in the economy" and "this in turn has given rise to a more optimistic outlook in relation to the future of the Island'seconomyandfutureemploymentprospects.."

I m  ai ntain the view that any increase in new j category employees is not having a disproportional impact

on house prices, and is entirely consistent with current States strategic and economic policies.

2. P lanningforHomes2006' makes it clear that property prices are subject to the normal laws ofsupplyand demand.The Planning Minister will be undertaking a review of the Island Plan this year. I shallbe working closely with SenatorCohen to ensure this document identifies building land tomeet the housing needsofIsland residents.

T h e d emand side of the equation – as pointed out in Planning for Homes' – is influenced by many factors,

including, at present, a more optimistic outlook in relation to the future of the Island's economy; and the continued availability of cheap mortgages based on high multiples of earnings.

H o w  ever, I am very conscious of the need for affordable housing to meet the needs of first-time buyers,

and to satisfy the commitment made by the States in last year's Strategic Plan, to expand home ownership. My Department's Ten-Year Property Plan, lodged today, seeks to address these issues, and others, in a sustainable way. I therefore refer the Deputy to the Property Plan, and to the statement I will be making today on that subject.

3. It mustberemembered that only developments that are in multiple units and are sold by wayofshare transfer rather than by flying freehold are capable ofbeingpurchased by non locally qualified persons. Save for a few historical exceptions individual houses are not allowed to be sold in this manner.Itfollows that within the context of the overall controlled housingmarketthenumber available tonon qualified persons is relatively small,and I have no evidence that locals are being restricted in theirchoiceof new homes,or that such purchases are putting any additional upwardpressureon prices in that section of the market. I wouldremindmembers that all such unitscan only beoccupied by persons with residential

qualifications.