Not the time to push up house prices

No less significant a figure than the newly appointed Assistant Housing Minister, Deputy Sean Power, has now joined the chorus of objection to a bewildering move which the minister has yet to come remotely near justifying.

In common with many other critics of Senator Le Main’s plan, Deputy Power says that it would be foolish in the extreme to tinker with a market that is currently overinflated to an obvious extent with a view to promoting demand. With commendable common sense, the Deputy points out that, as matters stand, a great many Islanders are struggling desperately to put a foot on the housing ladder in the face of prices which are nothing less than ludicrous.

It is conceivable that the sudden injection of new buyers into the housing market would prompt activity not only there but in the economy as a whole. It is also conceivable that this would be more than acceptable to those who have their eyes fixed principally on boosting economic activity and so helping to prevent the worst effects of the recession.

There is some merit in that view, but, crucially, it is not the responsibility of the Housing Minister to stimulate the economy in general. In addition, the potential costs of such a dramatic change in the rules are too great to be risked at this uncertain stage of the unpredictable proceedings.

What the Jersey housing market needs – for the benefit of Islanders who would dearly like to enter it – is, at the very least, a period of stability, and probably a period of readjustment downwards.

No one wants to see the catastrophic collapse of house prices being experienced in the UK or, perish the thought, widespread negative equity. It is, nevertheless, time for sanity to be restored, and we can be quite confident that the reverse will be evident if artificial means are used as a fillip for demand which simply is not needed.

Senator Le Main’s idiosyncratic and knee-jerk approach to this issue is especially baffling in a year when the States will hold a long overdue major debate on what levels of population and immigration the Island can sustain. The Housing Minister, to put it mildly, is putting the cart before the horse.

How the present clash between the minister and his second-in-command will resolve itself remains to be seen. It is, however, to be hoped that the report on the consequences of reducing the qualification period which is now being prepared by Housing department staff will introduce some realism and logic into ministerial thinking.