RISING house prices, rents and mortgage rates are continuing to drive Jersey’s cost of living up at a faster rate than in the UK, new figures have revealed.
The latest Retail Price Index report, produced by Statistics Jersey, shows that over the past 12 months housing costs increased by 5%, contributing to more than a third of the overall inflation rate of 2.8%.
Jersey’s RPI has dropped off since the last quarter, when it was 3.6%, easing some of the pressure on the cost of living for Islanders.
But the rate remains 0.5% higher than the UK equivalent, maintaining the trend of the past few years where Jersey’s cost of living has increased at a faster rate.
Economic Development Minister Lyndon Farnham said that the inflation rate was moving in the right direction, adding that particular efforts were being made to address rising costs in the Island’s housing sector.
‘RPI in Jersey is now just 0.5% higher than in the UK, which is the smallest since 2017, and it is good to see the gap being closed,’ he said.
‘Housing was the largest contributor, making up 1% of that overall figure, and that is largely due to the small increase in house costs and rentals.
‘Resolving the issues in the housing sector is a priority of the Common Strategic Policy and also a high priority for the Children’s and Housing Minister. And additional resources are being allocated towards this aim in next week’s Government Plan.
‘Andium Homes are bringing 800 units onto the market in the next 18 months, so that will have some positive impact on the supply and demand issues that the Island faces. What is also important is the work that is being done to improve property standards.’
Senator Farnham is heading a panel of ministers which is assessing how to keep Jersey’s inflation rate low and stable.
He said that the group will be producing a strategy later this year, one of the aims of which will be to inform States Members of the inflationary impacts of policies.
He added that Jersey has limit powers to control inflations, such as no control over interest rates, but he was ‘confident’ the work of the group would be productive.
Grouville Constable John Le Maistre, who is a member of the Environment, Housing and Infrastructure Scrutiny Panel, said that there are ‘simply not enough homes in Jersey’ to meet demand as the population increases and that is forcing up prices.
He added that his parish was actively looking for sites to develop affordable housing to help address the issue.
‘There is a drastic shortage of affordable housing in Jersey and it is something that is going to need to be looked at in the Island Plan,’ he said.
‘I think all the parishes are looking for sites for affordable homes. We don’t have a village in Grouville to extend but we are looking at other places in the parish.
‘The other issue is population control – if you keep letting people into the Island and don’t have enough homes for them it is going to drive up prices. It’s supply and demand.’
Jersey’s population has grown by more than 1,000 people per annum for the past four years due to immigration.
The Children’s and Housing Minister was contacted for comment.