As a scenic coastal community with a thriving economy underpinned by financial services, the island of Jersey has much in common with Cayman.
Despite a totally different approach to its property market, the similarities extend to a major affordable housing problem.
While Cayman homes can be bought by anyone, anywhere in the world with no restrictions, Jersey has taken the opposite approach.
The Channel Island, a British Overseas Territory of just over 100,000 people off the coast of northern France, has tight regulations controlling foreign ownership of property.
Residents must live on the island for more than a decade before being able to buy and sell homes.
With house prices in Cayman spiralling out of control, there have been suggestions that authorities here should consider similar controls.
One fact that may give pause for thought is that Jersey residents are facing similar issues.
As a price-control measure, the policy has been ineffective, says Deputy Rowland Huelin, assistant chief minister with responsibility for population policy.
“It is not working,” he told the Compass, “We have a real issue where we have seen massive price increases and one- to three-bed houses are becoming out of reach for many people.”
Michael de la Haye, chair of the housing development board on the island, agrees.
“Despite the restrictions on the market, the reality is that housing is still incredibly expensive in Jersey,” he said.
“Buying a house is out of reach for many people, especially young people, unless they are in very well-paid jobs.”
The board, headed by de la Haye, published a report earlier this year that suggested the housing market is “not fit for purpose” and that “bold action” will be required to make homes more affordable.
While there is no way of knowing what the situation in Jersey would be like with an unrestricted housing market, de la Haye said broadening access is not part of its recommendations.
“One can only surmise that the situation would be even worse if wealthy individuals from outside were allowed unlimited access to the market.”
As it stands, the situation is strikingly similar to that in Cayman.
The latest house price index showed that the average cost of properties in Jersey has reached £629,000 – equivalent to CI$721,000. Similarly precise data does not exist in Cayman but a Compass evaluation of real estate sale prices from 2020 put the average house price here at $705,000.
The average price in Jersey has rocketed by almost £100,000 in the past year – suggesting a similar trend to that seen in Cayman.
Interestingly, authorities in Jersey are targeting a policy that will be familiar to many here – more development.
“We have got to knuckle down and build more,” Deputy Graham Truscott – who sits on the Environment, Housing and Infrastructure Scrutiny Panel – told the Jersey Evening Post last week.
Speaking to the Cayman Compass, Deputy Huelin said the driving force behind price increases in Jersey was not foreign ownership. He said that “loophole” had been closed through the Jersey Housing Qualifications system and there is basically no holiday homes market.
Despite that, he said, there is a supply-and-demand issue. Unlike Cayman, Jersey has a tight development plan and there is a school of thought that the rules could be relaxed a little in some areas.
“It is a very expensive, slow process to build the sort of developments we need to keep up with the demand for affordable housing,” said Huelin.
A search for the cause of Jersey’s rising demand leads to a more familiar issue – population growth.
“We have migration that has exceeded forecast rates and it hasn’t been managed properly,” said Huelin.
Jersey’s population grew by 10,000 in the past decade. Even with new residents restricted in the housing market there are numerous exceptions and a growing number are beginning to progress through the system.
There has been, says Huelin, “an uncontrolled crossing of the chasm from not being able to buy, to being able to buy.”
The situation has led to concerns about inequality, with Jersey natives feeling left behind.
Listening to Huelin talk, he could just as easily be discussing Cayman.
“If you work in finance and you are very successful, you can afford it but there are people that want to pursue other careers that are very important for our society – trades, media, whatever it is – the rents are so huge they can never get round to squirrelling away enough savings for a house,” he said.
“There is nothing for the people that make the world go round.”
Loosening restrictions ‘politically unacceptable’
While the system of restricting access to housing may not have prevented price escalation in Jersey, there is no sense that it is part of the problem and no appetite for change.
It has been in place for many decades and primarily serves as a population-control measure, preventing the kind of influx of holiday home owners and retirees that has impacted coastal towns in the southern United Kingdom.
“I don’t think there is any real pressure for the rules to be relaxed, even from property developers,” said de la Haye.
“The property market in Jersey is buoyant and everyone knows that it would never be politically acceptable to remove the current restrictions,” he added.
The report’s recommendations instead look to more building and tighter rent controls as the answers. They include the introduction of a new rent commission, a government-backed affordable homes development programme and an estate strategy setting out how public land should be used for housing.