The Goose Green development at Sandybrook
A NEW States initiative offering Islanders the chance to buy half-price homes has officially been launched.
Housing will buy 46 discounted homes from a developer and sell them under the Jersey Homebuy scheme in an effort to help Islanders onto the property ladder.
Following lengthy negotiations with developer Dandara, the Housing Department has agreed to buy the 46 homes on the Goose Green site, each worth £450,000 on the open market, at a reduced rate of £260,000. Last week, 46 Islanders who qualified for the discounted homes were picked at random in a supervised lottery scheme.
Assistant Housing Minister Deputy Sean Power is pleased to have helped to kick-start the scheme. He said: ‘I have, with the Housing department’s chief officer, Ian Gallichan, agreed an average price of £260,000 each, or £11.9 million for the 46 houses.’
Article posted on 7th May, 2009 - 2.56pm
35 Article Comments
I can’t see how this benefits anyone other than the developer?
They get 46 properties they would not have been able to sell at the “market price” of £450,000. If they could have, they would all be sold by now. By the States subsidizing the full price of properties that were not selling they have artificially maintained a higher price for these properties than is true market value. We have all seen properties are not selling at present so prices are coming down – just look at the amount of “New Price” signs in property adverts. So again the States prove their financial incompetence. If I was buying 46 properties from a developer I would EXPECT a significant discount on the price.
So the developer is happy because they sold their properties at “market price”; the people who bought them will be stuck there as the equity in the property (only 54%) will mean they can never move to a similar size/price house or bigger/dearer; and the States expect positive press for this short-sighted intervention in a declining property market.
The financial success of Jersey is definitely in spite of the civil servants – but it does raise the question how much more financially well off would we be if we didn’t have civil servants who have proven themselves incompetent in all things financial?
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Excellent post Paul! Fully agree.
Dandara once again are laughing all the way to the bank…
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I think you have may have grabbed the wrong end of the stick Paul. Sean Power says in the article that the houses were purchased for £260,000 each. This is not part of the price but the whole price for a three bedroomed starter home (?).
This is a good move as long as the couples pay the same price as the wholesale price negotiated by Sean Power.
If this is the case, it will cast a different light and send out a clear message to the housing market and those people trying to sell a two bedroom flat for £275,000.
Clearly the market has gone soft even for Dandara.
Davey West.
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Dandara must be delighted to have finally offloaded these properties.Presumably the “lucky” people who buy them only technically own half of the house and will be unable to move up the housing ladder in the future.
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Why are so many new developments in Jersey built
in the awful style shown in the header photo.
Does anyone with a choice in the matter want to live in one of these Victorian looking places with miserably small windows and a front door with no porch?
They are so close together and their unnecessary height creates gloom in the immediate area. The lofts are probably trussed up to the rafters and unsuitable for any type of conversion.
Garage? Don’t ask.
Come on Jersey, abandon this allegedly traditional style and build places which people with a bit of imagination would enjoy living in.
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Quote:
Assistant Housing Minister Deputy Sean Power is pleased to have helped to kick-start the scheme. He said: ‘I have, with the Housing department’s chief officer, Ian Gallichan, agreed an average price of £260,000 each, or £11.9 million for the 46 houses.’
Please sell me all 46 then.
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And did the housing department pay G.S.T.??
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I have just shown the picture of this development to a friend who lives in our village.He thought it was some sort of prison block!I explained that it was a housing estate in Jersey and asked him to guess the price for such a house.When I related the story of the reduced prices and the original price I actually thought he was going to require an ambulance.
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can we half the price yet again ,maybe then i could get on the property ladder too! then again at 42 years old i would be dead by the time i could call it my home. oh well just have to keep renting my 2ft square squaller a little longer!
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Are these the same houses that the insurance companies weren’t keen on insuring against flooding? If so, could this have some influence on the fact that they haven’t yet been bought and the price has been reduced?
Just wondering…….
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You have to read the whole article rather than the stub on the website. But it’ll probably just make you more concerned. The discount of 42%, which is nearly £8.7 million, becomes a bond for Housing to invest in other Homebuy schemes. There’s no explanation offered as to why these substantial strings are attached. Also there’s confusion about the size of deposit the buyers have to produce. All these houses will be available to live in by next month, which shows how slow sales have been. Lucky the States was flush with cash and able to help Dandara out.
I hope Deputy Power and Senator Le Main will clarify all this in the States.
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Is this the same development where potential buyers had problems obtaining insurance cover because of the danger of flooding? Could this have had any impact on the prices of these properties dropping?
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Interesting.
Were any houses on that estate sold to individuals at the original asking price?
Will anyone now pay anything near the asking price for any other new Dandara flats/houses if there is a possibility that unsold houses will be sold off to the states at half price?
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Why didn’t these properties sell in the first place when the market was bouyant?
I was amazed planning permission was granted in the first place but when it was I knew they wouldn’t sell because of where they were built. Also how long will these last before needing to be demolished and rebuilt? Any guesses anyone? I doubt they will last 100 years maybe 50? What do others think?
Would anyone touch a place suseptible to flooding? Just look what happens in the UK when people end up on flood planes. After a couple of flood claims the insurers shut up shop and as you know without insurance cover a property is virtually unsaleable. I just hope no one is left with something they can’t get rid of. If Dandara offered a buy back after 30 years then yes, maybe worth a punt in my opinion.
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Anyone who owns and insures their own house knows how much it is worth, because they have to insure for the reinstatement value, rather than the market value. The difference between the two (allowing a proportion for the site value) is the percieved ‘market value’ It’s a bit like the ‘goodwill’ paid when purchasing a business and depending on market conditions, such value, along with your hard earned cash will simply evaporate into thin air when times are bad.
Unfortunately, those who paid the ‘market price’ have been truely shafted.
The same thing has happened in the motor trade when cars are discounted. Thouse who paid ‘list price’ lose the most !
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Following on from my previous e-mail, regarding the value of these ‘discounted’ houses, lets say that they are 900 square feet and a rebuilding cost of £225 per square foot so that’s £202,500 plus site value – lets say £57,500 and this adds up to £260,000
And they were originally selling for £460,000…..
Whoops !!!!!
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They are not worth £260,000. Much too risky to consider buying a house that may well flood.
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I smell a rat…
There will no doubt be some agreement, cashback or planning passed…Dandara didn’t do this for nothing!
Anyway, who wants to live in a house you own half of, that no-one will buy off you…
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hmmmm , so have Dandara sold at a loss, sold at cost or sold with a small profit to Housing? Lets assume sold at cost at £260k. And the normal retail price is £450k each.
Wow, that is some profit per house.
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went to look at the unsold /unfinished homes.
quite a few have a lot of patches of re done render on the outside.
good comment warren j.
we have allowed house prices in jersey run away with themselves.
a house is somewhere to live and bring your family up, and grow old in, not just a nice little earner or some investment portfolio.
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THey would have still made a profit on them. Land cost £100k – £110k per house building cost £80 – £90k
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Warren J, if you can find a plot with planning for a house for £57,500 I would like one, its more likely 2 or 3 times that, but would love to be proved wrong!
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also (from my last post, what about other costs like:-
Planning fees, interest on loans, lawyers fees
agents fees, roads, drains, landscaping, its not as simple as land value plus build cost!
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If they were uninsurable due to the flooding risk that would prevent a purchaser raising finance to buy as appropriate insurance would be a pre-requisite for any lender. The value of such properties would be massively diminished leaving perhaphs the states as the only possible cash buyers to bail out Dandara.
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Any chance the states could do the same with cars the garages are struggling and I would love a Porsch.
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Gary # 22 & 23 – yes I have probably undervalued the site – im am not FRICS or a QS. (As for rebuilding costs for insurance purposes, these take into account professional fees, site clearance etc) But this blog is actually about the fact that something that was one minute worth £450k on the open market gets discounted down to £260k. So did Dandara make a loss and the States get a bargain ? Or did both parties walk away and feel that they had done OK ? My guess is the latter.
Lets face it, with economies of scale and Dandara’s buying clout, these houses probably cost £150k each to construct. Then there is the cost of the sites, so lets say £110k so we are back to the aformentioned £260k per house. Yes, but then this is a new, green, (wet) field site, and there was indeed the cost of the roads and laying of services. And who has paid for these ? Ah the private individuals who paid full market (retail ?) price !
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Mmmmmm, a friend of mine was originally on Dandara’s waiting list to get one of these houses, but pulled off it due to the threat of flooding, he wasn’t willing to take the risk.
Also, did the full article not say that to qualify you had to have at least 1 child under the age of 3 (not completely sure about the age of the child part).
Why do the childless always get discriminated again? Why are the childless the only ones that it is still completely legal to discriminate against? And what if you do want children but wish to be sensible and know that you can afford the house first before having the children, it’s certainly more commendable than those that continue having kids in houses that are too small and then find they can’t afford to upsize!
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Warren J #26. Ah the private individuals who paid full market (retail ?) price !
I feel for these first time buyers if they did pay the mad £450 grand for substandard boxes. They have just entered a world of negative equity and I blame the banks for being stupid enough to lend them the money in the first place. Over £2000 quid a month in mortgage repayments…you have got to be mad?
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I think most of you are missing the point to this.
The houses on this scheme are helping young jersey families “buy” their first house and pay about the same mortgage as they are paying in rent,but after the 5, 10 or 20 years when they decide to move they will have some money to use for a deposit on another place rather than nothing.
Houses are not just about making money but some where to live and grow up in, if this scheme keeps families in jersey because people dont have to rent a 2 bedroom flat for £1500 a month i think it is a good idea.
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But James, why only those that already have a child rather than those that sensible want to get the house before having the child?
What about young-ish couples who want to join the property market but need more than a 1-bed cause they are also a carer for a family member?
It’s not just about making money, but apparently it is about discrimination!
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Leah you always sound so bitter against those who are being given a chance to have a family home with their children.
I think the point is if you work you can save and buy your own home. Where as with kids its harder.
I think although its suss its nice to see families being given a chance for one not hand outs to the elderly as usual
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Not bitter Sarah, definitely not, doesn’t change the fact that this setup only helps certain young people and not all equally.
My friend wants kids but has chosen to try and get the house before getting pregnant, which to me is the sensible thing to do, now she gets no help but those that didn’t do the sensible thing do. She could do what others have done, get pregnant and live in a cramped space with a small child but if something goes wrong and she ends up not getting a house (and some of the applicants won’t get one) then she would be left with an even bigger child in that cramped space.
From my point of view she has done exactly the right thing but now the States have turned round and rewarded those that chose the other option and are offering nothing to her.
If you think that’s fair feel free to explain how cause I don’t see it.
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And Sarah H, these people with kids had the opportunity to save and buy a house did they not? They had the same opportunity as any of those that currently don’t have kids? It was a choice they made.
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I would imagine the main reason why all the properties are 3 bedroom houses is due to the fact that statistically, 3 bedroom houses are in highest demand amongst those applying for States Accommodation. The fact of the matter is that La Providence is a “Pilot” scheme. It’s the housing dept’s first attempt at doing something like this, and most people haven’t paid enough attention to realise what’s going on.
Maybe the States Houses were all available for families only, but what about the other 55% of houses on the estates, sold under the First Time Buyers scheme that were, for the vast majority, sold to couples WITHOUT children.
I say fair play to the Housing Dept, it’s a wonderful idea for those people who can’t afford to get onto the First Time Buyers list who need a family home.
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**“market price” of £450,000**
How could the State said that they’ve paid half price?
All of Jersey properties’ price aren’t the real price.
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