Savills Portugal

Sustained demand fueled by a continued emphasis on lifestyle change and a shortage of available property has led to strong price growth in Guernsey’s rental market this year – although there are now signs the rising cost of living may well be starting to bite.

For the first six months of 2022 monthly rental prices held a steady course and demand among would-be tenants remained incredibly high, especially for homes with a garden and more outside space.

However the latest States of Guernsey property update shows a 5 per cent drop in average rental prices for the three months to the end of September – although at £1,726 per calendar month the figure is still 7.9 per cent higher than the same time last year.

The quarterly figure is reflective of what we’ve seen on the ground. Professionals, corporate relocators and families are still driving demand and good quality, sensibly priced properties remain popular.

But there are certainly fewer people looking than when compared with earlier in the year. This can often be seasonal – and it’s no surprise to see a slight slowdown over the summer and as we approach Christmas – but the increase in living costs does appear to be making people more cautious.

Historically Guernsey has always been well placed to weather any financial storms. Fundamentally the reasons for people moving to the island will not change and its status within the world of banking and finance means there will always be people wanting to relocate.

But looking ahead it will be interesting to see how the wider economic factors affect the market.

Some landlords have now decided to reduce their monthly asking price in order to reflect tenants’ budgets and secure a rental rather than risk their property staying empty.

We may find that growing numbers of people also decide to renew their tenancies with current landlords rather than face paying the costs associated with a new move, while some landlords may decide to keep rents relatively stable because they value having a long -term tenant who will look after their property – fostering a relationship that engenders loyalty and longevity.

We may also start to see people who had previously been looking to buy now turning to the rental market in the short to medium term as they wait for the economic situation and the impact on their own finances to become clearer.

With tenants wanting value for money, making a good first impression and ensuring the property is well presented will be more important than ever. It could also pay for landlords to have a degree of flexibility in tenancy agreements – such as considering a tenant with a pet if they have excellent references.