Open Market: Switching properties from Local Market and new inscriptions

After much work behind the scenes, the Committee for the Environment and Infrastructure has now released its policy on Open Market part A inscriptions.

On its face, it is more permissive than might have been expected, allowing 3 new inscriptions every year in addition to an unlimited number of “swaps” for downsizing, where an Open Market badge is taken from another property and applied to the new one. Key changes introduced by the policy include improved quality and availability, the collection of revenue, stakeholder collaboration and transparency and equity.

As ever, however, the devil is in the detail and there are some considerable hurdles to overcome before inscription will be allowed, not least the approval of legislation.

Ferbrache & Farrell LLP prides itself on being the only advocates in the island with the required mixture of public and private law experience to navigate what is bound to be a set of careful negotiations with the States of Guernsey.

The policy provides much welcome clarity on the position and can be found here.

There are five policy principles namely:

1. Part A of the Open Market should support and enhance Guernsey by attracting people to the island who will make a positive contribution to both its economy and its community.

2. Open Market Part A properties should be high-quality dwellings in a variety of types, sizes and island locations, aligned with demand.

3. The Open Market Part A should be perceived positively as an attractive element of residence in Guernsey that permits easy relocation to the island for those wealthy enough to afford the properties.

4. In order to protect the Open Market, the number of new inscriptions onto Part A of the Open Market housing register should be limited to a low number in any given year, and this limit should be carefully monitored.

5. In order to protect the Local Market housing stock, only prospective new-build properties, or in circumstances where an existing Local Market property is demolished and a new property constructed in its place (also known as a one-for-one replacement) should be eligible for a new Open Market Part A inscription, unless there are exceptional circumstances as set out in guidance provided by the Committee for the Environment & Infrastructure.

Concerning new inscriptions, there will be three per year (on a first come, first served basis), with two criteria both needing to be met:

1. The property to be inscribed must be a prospective new-build property or a one-for one replacement, for which planning permission has been granted, unless there are exceptional circumstances (as defined in supplementary guidance ); and
2. At the time the application is submitted, construction has not completed.

Concerning transferring existing Open Market Part A inscriptions to a Local Market dwelling for downsizing, there are again certain criteria, all of which must be met:

1. Both properties involved in the transfer must be under the ownership of the same applicant; and
2. The applicant must have 20 consecutive years’ ordinary residence in the Open Market Part A immediately prior to making the application: and
3. The property from which the Part A inscription is to be transferred must be the applicant’s principal private residence and not form part of the Fort George Estate; and
4. In the event the property is owned by a legal person (i.e. a company), criteria Two and Three must be met by the ultimate beneficial owner of the company.
5. The dwelling to which the Part A inscription is being transferred must have a total internal floor area which is at least 25% smaller than the dwelling to be de-registered; and
6. The dwelling to which the Part A inscription is being transferred must be complete and in a habitable state.

As one would expect, there is requirement for a legislative infrastructure around these important changes, and we will be writing on the subject in the course of our next updates.

For all public law, regulatory and property law matters, including UK Real Estate, please feel free to contact @Alastair Hargreaves or  @Robin Gist  or @Anna Douglass who will be delighted to assist.