Jersey’s housing market has worsened its social mobility

Sir Mark Boleat

By Sir Mark Boleat

SOCIAL mobility is about the ability of people to change their socio-economic status. There is a wealth of evidence that people’s life chances are to a large extent determined by their family circumstances. The children of well-educated high-income people are more likely to themselves be well-educated and go on to earn a high income compared to those from a less advantageous background.

On 29 September, 30 people with an interest in social mobility participated in a Policy Centre Jersey discussion, meeting on the impact of the housing market on social mobility in the Island. This followed the publication of a report on the subject on the Policy Centre’s website –

The operation of the housing market has worsened social mobility in Jersey. Those who bought homes many years ago have benefited from the significant rise in house prices and many have been willing and able to use the increase in wealth to help their children with housing costs, in particular, to become home owners. Those who have been tenants have been less able to do this and their children have been priced out of the market.

Housing is not seen as being a key driver of social mobility generally compared with, for example, conditions in childhood and education. However, Jersey’s special circumstances mean that it is relevant, because people have to live close to their work and house prices have increased substantially in real terms.

In the UK, the fall in home ownership generally has been far more pronounced among those whose parents are not homeowners. Home ownership and housing wealth accumulation is increasingly associated with parental wealth. This applies more so in Jersey given that house prices have risen faster than in the UK.

An important role is played by the “Bank of Mum and Dad” in helping people meet housing costs, and particularly to become homeowners. But many households are struggling to meet day-to-day costs and are in no position to help children with a house purchase. Tenants are more likely to be in that position than owner-occupiers.

The most recent Jersey Opinions and Lifestyle Survey found that 46% of social housing tenants and 34% of private tenants found it difficult to cope financially, compared with 14% of owner-occupiers.

For a large section of the population there is a two-tier market in Jersey:

  • Those who can be helped by their parents to buy housing, with those parents having acquired capital, partly as a result of the rise in house prices.

  • Those who cannot be helped by their parents to buy housing. Many of those parents having been tenants and have therefore not acquired capital as a result of the rise in house prices.

Figures from Statistics Jersey show that the rise in house prices has effectively removed the effects of tax and benefit policies in reducing income inequality.

Income inequality in Jersey is greater than in all but two European countries – even before housing costs are taken into account.

In a discussion at the meeting, Michael Van Neste, a former chair of the Jersey Homes Trust, argued that the lack of housing in Jersey was the reason for poverty in the Island and that the only way to eliminate poverty was to build more homes. He suggested that Jersey’s lopsided economy has led to a stratification of society – finance and related sectors pay their employees well, enabling them to be well housed and their children to be well educated. They have put the price of housing beyond the rest of the community.

The discussion also covered education – which is generally regarded as one of the most important determinants of social mobility. One key point from the discussion was the need for better higher education provision in the Island. Currently, young people from lower-income families find it difficult to meet the cost of studying in the UK.

Identifying the issues in social mobility is relatively easy – doing something about them is far more difficult. The starting point has to be an acceptance of the need to address the issue.

In respect of housing, the broad options are to increase the supply of housing (so reducing prices), or to seek to redistribute the gains in wealth that have resulted from the increase in house prices. But tackling social mobility faces political problems – the beneficiaries of the rise in house prices are far more likely to vote than those who are suffering the consequences.

  • Sir Mark Boleat has held a number of leadership positions in companies, public bodies and charities in Jersey and in the UK. He is Senior Adviser to the Policy Centre Jersey.

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