Five minutes away from the financial temples and bustling street of St Peter Port, a sea the colour of cornflowers gently laps the blanket soft sand of Pembroke Bay, on Guernseys north coast. That sight alone is enough to make anyone want to live on the island. But its only one of the reasons many Britons are drawn to the Bailiwick.
Guernseys benign tax regimea flat income tax of 20% and no corporation, capital gains (CGT) or inheritance taxhas historically lured buyers from British shores. However, the introduction of taper relief in the UK and the rise in number of wallet-friendly destinations across the world have slightly dampened tax-driven demand over the past few years.
Five years ago, most peoples reason for moving here was tax, says Matthew Henry of local estate agents Swoffers. Now, its almost a second priorityalthough lately there was a concern about the change of leader in the Labour Party and we have people now actively looking to move.
The island is no longer seen as just a quick fix to a CGT liability, agrees Richard Fox of estate agents Martel Maides. The recent declaration regarding levying tax on non-domiciled [residents] in the UK will undoubtedly be of some benefit to Guernsey but the island now competes with far more alternative jurisdictions that offer their own attractions.
No, what really draws property buyers here is the fact that Guernseywhich forms the Bailiwick together with the islands of Herm, Sark, Alderney, Brecqhou, Jethou and Lihouoffers a quality of life thats hard to match anywhere in the British Isles.
Guernsey is becoming an attractive home for an increasing number of people who appreciate its informal, laid-back lifestyle, says Ross Le Marquand of Cooper Brouard estate agents. Whether its the picturesque cliffs and beaches or the sophistication of the fine dining, theres something for everyone.
Families moving to the island get access to good jobs, better schools and swift medical care. We enjoy a high standard of education, and the College of Further Education has been at the heart of developing Guernsey into a centre of excellence by providing a wide range of training for the islands finance industry, says Mr Le Marquand. Guernsey is now a financial centre that spans investment advice, fiduciary services, accounting, personal tax planning and much more.
At the same time, treble-locking the front door with a high-security key is hardly a requirement here, and the streets are a safe place to walk even in the evening.
We have people who moved over here whose children are now looking at coming because theyve seen the benefits of the Guernsey lifestyle, says Mr Henry. If you leave the island at 7am, you can be in central London at 9amlike most commutersbut you also have the beaches and good schools here. The other main attraction is that this is a safe environment.
Even better, Guernsey has all the advantages of living abroadmild, sunny weather, a slower pace of life, secret little coves and endless expanses of sea and beachwith none of the challenges. Language, driving style and even high-street brands are the same as in the UK, and the culture and education system are very similar.
The island remains a very desirable place to live, with a quality of life thats particularly reminiscent to many of a time since past in the UK, says Mr Fox.
Those of us who have chosen Guernsey as our home enjoy island living, like a sensible tax regime and a quality of life which is relaxed and uncomplicated and yet very competitive, adds Chris Lovell of Lovells estate agents. We are conscious of the need to keep up with the changing patterns of life, but we do so with taste and dignity and retain the character and charm associated with traditional values.
Alas, paradise comes at a price. In 2007, the open marketthe segment of the Guernsey property market open to incomerssaw plenty of activity. Both the number and the value of transactions have grown over the past year compared to previous years, probably by about 15% over the past 12 months, says Mr Lovell.
Mr Henrys company, Swoffers, estimates that the cumulative value of open-market homes increased by 57% last year.
One of the reasons for this, explains Cooper Brouards Mr Le Marquand, is that Guernsey tax initiatives [no corporate tax from January 2008] attracted new business to the island, key personnel required housing and open-market property provides a simple solution. The highest recorded price paid for this type of property was broken three times. This also buoyed confidence, further stimulating sales.
According to Swoffers, the average value of open-market sales reached £1.494 million last yeara 47% increase over 2006 and a staggering 95% rise over 2002after some transactions achieved dizzying figures of just under £8 million.
Of course, warns Martel Maides Mr Fox, the concentrated activity at the higher end of the price range distorts statistics, so it would be wrong to look at increases in average values as telling you anything particularly relevant. Plus, he adds, the market became steadier at the tail end of last year and has remained so thus far.
However, Swoffers Mr Henry believes demand is now picking up pace. We may not see the same level of activity as 2007, but I think well still see a good year.
In any case, even in a steadier climate, prices remain substantial because property supply is strictly limited. In a bid to protect local residents, Guernsey has long controlled its housing market. The majority of the stock is reserved for qualified residents, such as people who were born and have continuously lived on the island. Incomers can only purchase the 1,700 or so properties that are listed in the Register of Open Market Homes and, particularly in recent years, only a handful of these have come up for sale at any given time.
The undersupply of new instructions can be put down to new residents actually becoming part of island life and staying longer, says Mr Fox.
On an average year, open-market sales are in the region of 85 to 95. In an exceptional year, like 2007, they barely go above 110.
Land is a finite resource on any island, and we do have a shortage of housing, resulting in fairly high prices, but these arent out of line with many popular areas of the UK, Europe and further afield, says Mr Lovell. Prices start at around £750,000 and rise rapidly according to location, size and quality of accommodation.
This state of affairs is unlikely to change in the near future, and, although Mr Lovell points out that the island is not immune from the uncertainties of the wider world, it means that Guernsey is less prone to be affected by the property slump that threatens to cast its shadow over the UK.
There is a feeling that less valuable property has probably topped out, but higher-value homes are still seen as having potential for capital growth, says Mr Fox.
And this, together with the strengthening Euro, which has made traditional European destinations somewhat more expensive, makes a prestige home in Guernsey an appealing investment option. Historically, Guernsey has always retained its prices, even when other jurisdictions havent, says Mr Henry. But then, he adds, property investment, although important to buyers, is more than matched by the other reasons for moving herethe tax implication and the lifestyle.
Not to mention the beaches.
Portinfer Lodge, Vale, Guernsey
Portinfer Lodge has many draws for a buyera picturesque five-bedroom home, an idyllic setting on the islands west coast, brilliant blue sea views from several roomsbut what makes it really special is the walk out from the back garden straight onto the beach. Imagine strolling along the shore every time the urge strikesand for those who cant contemplate even taking a few steps, theres an outdoor swimming pool with a Jacuzzi for soaking up the waters and the panorama. The property, which has been recently renovated but could benefit from further upgrading of a few internal rooms, also comes with a two-bedroom local market cottage. The asking price is £1.95 million through Swoffers (01481 711766; www.swoffers.co.uk).
Merton House, St Andrews, Guernsey
The striking Art Deco façade of Merton House stands dazzling white and supremely elegant against a verdant backdrop of lush gardens and mature trees. Sensitively restored, fitted and furnished, the five-bedroom house nonetheless doesnt scrimp on modern comforts, such as the open-plan kitchen with granite worktops. Outside, there is a patio and a seating area encircled by flowerbeds thats perfect for outdoor relaxation. Selling agents Martel Maides are seeking offers in the region of £2.75 million for it (01481 713463; www.martelmaides.co.uk).
Le Pont Renier, St Peter Port, Guernsey
Selling agents Cooper Brouard call five-bedroom Le Pont Renier, near St Peter Port, an outstanding family home. A pretty period façade hides spacious interiors that blend traditional style (open fireplaces, roll-top baths, an Aga in the kitchen) with contemporary solutions (concealed storage cupboards) and comforts (a Jacuzzi in the conservatory). Theres also a one-bedroom self-contained wing for relatives or staff. Lush terraced gardens border the house and are home to a swimming pool, a pond and a vine house. Price is rigorously on application to Cooper Brouard (01481 23603; www.cooperbrouard.com).
