House prices a record high in Jersey, more Brexit fallout on the Rock, and the Isle of Man Budget

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The average house price in Guernsey for local market properties rose by 0.8 over the course of 2019. The price was £441,295 in the fourth quarter of 2019, up from £437,909 in 2018. There were 830 local market houses sold in 2019, 20 more transactions than in 2018.

The median house price in Guernsey for open market properties was £1.5m, down from £1.4m in 2018. There were 67 open market houses sold in 2019, nine fewer transactions than in 2018.

Values have been more bullish in Jersey, where average house prices have reached the highest in the island’s history. The Jersey House Price Index showed the average property cost £518,000 at the end of 2019, up 7% from £484,000 in 2018 with the average four-bed property now costing more than £1m. Transactions were stable compared with 2018, due to increased sales of flats but decreased sales of houses. Housing affordability decreased on an annual basis with all property types being less affordable to purchase than in 2018.

Comparing like with like, average prices in Jersey stand at £537,000 in contrast to £478,000 in London. Using the same measure, average UK prices are £234,000 and in Guernsey the average is £441,000.

Also in Jersey, the Better Life Index, which was first produced and published in 2013, has been released for 2018. The OECD measure assesses social and environmental, as well as economic factors.

Jersey had an overall Better Life Index score of 6.6 (out of 10), ranking the island 19th out of 41 nations. This placed the island above the OECD average but below the UK and France. Jersey remained the same overall rank as in 2018 and was ranked in the top ten for jobs and earnings, health status and community but ranked bottom for civic engagement. 

Gibraltar

According to the Financial Secrecy Index – published by international campaign group the Tax Justice Network – Gibraltar is now ranked 30th in the world, up from 83rd, while the UK has risen from 23rd place to 12th. The Tax Justice Network says its index ranks countries on how easy it is to hide and launder money.

The increase in the volume of financial activity conducted on the Rock by non-residents is a key factor in the higher ranking (rather than lighter regulation) but Gibraltar did score badly on twelve indicators: including public company ownership and accounts, avoiding promoting tax evasion, and its trust and foundations register. The UK Treasury does not recognise the basis for the Tax Justice Network’s assessment.

Financial services firm the GSX Group is to expand into Estonia, transferring its business, customers and technology to a different company-GBX Estonia. The firm will keep its headquarters in Gibraltar but will surrender its licences and will no longer be regulated by the Gibraltar Financial Services Commission. CEO Nick Cowan says the group needs a presence in Europe with Estonia being the jurisdiction of choice because of its progressive approach to Distributed Ledger Technology.

Also on Brexit, the first meetings of the committees established under the Withdrawal Agreement on the departure of the UK and Gibraltar from the European Union took place in Algeciras.

The departure of Gibraltar from the EU will be executed utilising the Gibraltar Protocol to the UK-EU Withdrawal Agreement, the four Memoranda of Understanding and an International Tax Treaty. These MoUs and the committees established under them largely come to an end on 31 December 2020 in line with the transitional period.

On development, plans for 111 apartments and car parking spaces on the site of the Old Casino have received full planning permission. Also updated plans for a ‘Forbes 1848’ development on Devil’s Tower Road were unanimously approved by the Development and Planning Commission. The 16-storey Forbes development was given the go-ahead and will be built on the site of the old Ready Mix site.

IOM

The annual rate of inflation as measured by CPI increased in January 2020 to 2.6% up from 2.1% in December 2019. Transport was a key driver of inflation and air fares plus petrol/diesel were also up. Prices for clothing and footwear dropped and price rises in food and non-alcoholic beverages also slackened but not enough to prevent the 0.5% jump.

On the labour market, the number of registered unemployed on the island increased by 36 compared with January 2019. This left the unemployment rate for January 2020 unchanged from December at 0.9%.

Treasury Minister Alfred Cannan has outlined the Manx Budget. Government spending for the year is projected to be £1.07bn, up £29m on the previous year.

The spend of £541m on capital projects between 2019 and 2024 include:£1.5m for a fibre optic network; £6.8m for airport ground surfaces refurbishment; £1.4m for a runway instrument landing system; £1.4m for bus replacements; £4.5m for heritage railway renewal and a TT race timing system.

Continued funding for the Douglas Promenade Refurbishment and a new ferry passenger terminal in Liverpool were also confirmed. There was also an extra £11m to fund initiatives such as the removal of silt from Peel Harbour and marketing the island overseas.

To pay for it all. a 5% increase in the NI upper earnings limit will mean c3,500 people pay up to £202 more and overall those earning more than £42,000 will be up to £78 worse off. Personal allowances go up £250 to £14,250, meaning 465 islanders will no longer pay any income tax and c41,000 people will benefit from a 10% rise in the earnings threshold for NI, saving up to £74 per person.

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