[adren]

I live on the Isle of Man.
The IOM is a UK Island Dependency with its own government and taxation system. However in practice a lot of things are strongly linked to the UK. Prices are similar, we use UK pounds, income base rate that kind of thing. The housebuying process is simlar to England and Wales (ie not tender eg Scotland).
The economy is strong with low uneployment. It has moved from a failing tourism/agrarian economy to modern financial services and IT/comms over about the last 15 years or so. Favourable taxation means certain professionals have moved from the UK to the IOM and the place is doing OK.
That's the context, here's the meat:
House prices here are very high and on a par with Oxfordshire. Increases over the last few years have mirrored the UK with double digit rises since 2000 meaning a decent Victorian 4-bed terrace in a nice street but without garden or parking is on for around 270K. Add 120K to that if you want a view.
When questioned, EAs give the following justifications :
1. "The IOM has always been expensive"
2. "Its a small market so it doesnt behave like the UK"
3. "People dont have to sell"
4. "Its worth it"
5. "Renting is dead money"
6. "You wont lose money on it"
7. "It will pick up again when interest rates go down/winter comes/spring comes"

The people here are great and the EA's genuinely seem to believe these points. I have some sympathy for the vendors . One guy "needs 250K" else he cant afford to move to the next place, where the vendor "need 280K" to buy the next place... and so on. I think the 250K house is worth (to me, for a family to live in - not for investment) no more that 190K. And a stand-off is developing where large numbers of optimistic vendors are chasing smaller number of ever-more cautious buyers. Local first-time buyers/ newly wed type are hit hardest with almost no chance of getting somewhere and the Manx government has introduced grants to help them out.

These is some anecdotal evidence: A tale of a cash buyer getting a 299K house for 240K. A developer hoping for 300K hinting that 265 would do (still too high). Reductions from 375 to 325 and 400 to 365 seen in my locality. A three bed terrace is on here for 400K but can be rented for 1200pcm = 3.6% yield.

Is there anyone who has lived or does live in the IOM or channel islands on HPC? Any anecdotal tales? Particularly: what happend on the IOM during the last crash? EAs here say prices simply stopped going up for a long time and the drops seen in the UK during that period simply did not happen here. Any tips?

This post has been edited by adren: 22 September 2005 - 10:53 PM

[adren]

Update.
265K recently down to 250K.
Whole row of houses all on for around 220K were not selling.
One has now broken ranks and is on for 199K which hopefully will precipitate competition.
Local paper records all transactions:
Most at 150K. Couple 150-300K. A few 300K+.
North of the island looks very reasonable.
South of the Island looks very pricey, about 20% over the top.
East/West somewhere in between.
Vendors holding out for high prices due to constraints of next run gon the chain.
EAs still swearing blind that this market is different from the UK's.
Evidence is that the dynamics are exaclty alike.
Mustnt grumble too much cos its a great place to be.

[adren]

Isle of Man latest.

Rapidly becoming a mixed bag here. Lots of properties are "stuck", many reductions around the place, multiple For Sale signs, typical signs that asking prices are too high across the board. Oddly, just when you think it's a good time to put in an offer, the target gets snapped up. Buying prices are published in the paper but often weeks a later and it's a pain to keep up to date with them.

Anecdotals:
Big house near us 550K now 450K (ca -20%) over a year - available
Another big one was 450K now 400K (ca -12%) over a year - available
Others:
365K to 349K (ca -5%) over a year - available
255 to 239 (ca -6%) over 6 months - available
289 to 270 (ca -6%) over a year (sold)
255 to 229 (ca -11%) over a year - available

Another little place up the road was on for 170, and has just been renovated (quite a bit by the look of it - new facade the whole lot, can't have been cheap) and is back on at... 170. Don't know the background story to it, though.

Meanwhile, there is lots of stuff that has been on the market for 2 years. Prices haven't budged.

The EAs continue to be cordial but either evasive or clueless. I have tried to explain that I am a cash buyer but will not entertain chancers, dreamers or developers - I just want a home at a reasonable price. To which I get the same response "Ah but the island is different, properties are selling, etc". They must be getting driven mad by some of the vendors since some of these prices are simply crazy.

Good value continues to be had in Douglas, Laxey, Ramsey, Ballaugh etc.

Meanwhile, some people are just having a laugh.
Exhibit A:
http://www.harmonyho...sp?lProp_Id=615

[wsn03]

Hi there, fellow manx resident of days gone by - lived near Douglas from 1970 (aged 2) to 1995. Live in England now, have family (and even a new business) in Isle of Man still.

To answer your question - the last crash. I was a kid, it was bad, the EAs are talking sh*te - crashes there happen when people from the "Mainland" head home if jobs market downturns.
I remember hundreds of empty houses on the market not selling, some for up to 3 years. Prices nose-dived. If anything risks are far higher there, economy lacks diversity - all it has to rely on:

- Offshore Finance (in the process of being nailled by EU)
- Some IT (not a lot really, its cottage industry stuff)
- Some films (see above)
- The TT

Have I missed anything?
The biggest nail in the coffin is the new 0% business tax about to happen. Great for people with businesses (like me), but err how then does the Island earn its keep? Unless of course the gov expects me to earn lots of cash and then move and settle there? I asked the DTI this question - dry smile, no comment.

Ok, so lots of millionares go there, great only they've set the tax ceiling at £100,000, so again not enough revenue on the way.

I'm pretty well connected with many in the know over there in gov (including a senior civil servant in the family) - they're all worried about the Island will balance its books.

As soon as the jobs bucket tips mainland people will flee, thats your housing downturn.

FYI I find it all grossely over priced, especially considering the salaries on offer. Frankly I only have my business there because 2 of its key members live and insist on continuing to live over there - its a real inconvenience for me.

This post has been edited by wsn03: 17 August 2006 - 01:21 PM

[adren]

wsn03, on Aug 17 2006, 02:19 PM, said:

Hi there, fellow manx resident of days gone by - lived near Douglas from 1970 (aged 2) to 1995. Live in England now, have family (and even a new business) in Isle of Man still.

To answer your question - the last crash. I was a kid, it was bad, the EAs are talking sh*te - crashes there happen when people from the "Mainland" head home if jobs market downturns.
I remember hundreds of empty houses on the market not selling, some for up to 3 years. Prices nose-dived. If anything risks are far higher there, economy lacks diversity - all it has to rely on:

- Offshore Finance (in the process of being nailled by EU)
- Some IT (not a lot really, its cottage industry stuff)
- Some films (see above)
- The TT

Have I missed anything?
The biggest nail in the coffin is the new 0% business tax about to happen. Great for people with businesses (like me), but err how then does the Island earn its keep? Unless of course the gov expects me to earn lots of cash and then move and settle there? I asked the DTI this question - dry smile, no comment.

Ok, so lots of millionares go there, great only they've set the tax ceiling at £100,000, so again not enough revenue on the way.

I'm pretty well connected with many in the know over there in gov (including a senior civil servant in the family) - they're all worried about the Island will balance its books.

As soon as the jobs bucket tips mainland people will flee, thats your housing downturn.

FYI I find it all grossely over priced, especially considering the salaries on offer. Frankly I only have my business there because 2 of its key members live and insist on continuing to live over there - its a real inconvenience for me.

Update time.

Thanks wsn03 for the advice. It makes sense and little whispers I hear of banking redundancies "across" make me fear for some livelihoods over here in banks, accountancy, related professions, and all the periphery - people who make sandwiches, sell computers etc. If a bunch of people get canned at the same time then wsn03's crash scenario will be upon us.

In the meantime, some anecdotals:
Nothing sold all summer but then a flurry in August: several of my "targets" were snapped up.
Meanwhile the rest of the vendors appear to be in 4 categories:

Manx retirees:
Nice houses up for silly money by way of a retirement plan booster. Many up for a long time. Vendors don't appear that fussed about selling. Maybe they are hoping for someone daft from Oxfordshire or somewhere with 1/2 million burning a hole in their pocket (it happened a LOT last couple of years). I think these people are about to miss the boat but they dont actually seem to care. Good for them, but I tend to avoid these.

Developers:
Magnolia, Plasma and particle board abound. Prices too high once work is completed and the developer has added some fat. Numerous examples standing empty, to let or carrying gradual price reductions. Largely awful workmanship using cheap tat. Parking non-existent for some buildings. A problem when you have converted one of them into three flats. I tend to avoid these too.

Normal people:
Familes getting bigger, moving town, job, back to UK etc. Generally fair, "lived in" buildings. Some evidence of reality setting in with some reflected in the price and general demeanour. I would consider these.

Vacant:
Some ex-elderly, ex-guesthouse and ex-digs accommodation starting to pop up all over the island. Generally very rough, very big, and (comparatively, per unit space) very cheap. Daunting work for whoever wants to get involved with them. Potential money pits. Developers seem to be staying away whereas they would normally be right in there. Possibly because their hands are full, possibly because the sector is mined out. I would consider one at the right price but it's going to be hell for my Black and Decker gear and heating bills.

I continue to bide my time. There is only one way prices are going here at the moment.


Please, anyone got more tips do pipe up.

[wsn03]

adren, on Oct 10 2006, 01:53 PM, said:

Vacant:
Some ex-elderly, ex-guesthouse and ex-digs accommodation starting to pop up all over the island. Generally very rough, very big, and (comparatively, per unit space) very cheap.

Adren, these used to be called Hotels; when I was a kid the beaches were still swamped with tourists and the Island was still denying Spain was a better option...........within about 5 years the tourists vanished, and then hotels were cheap.

Over the last 15 years same buildings have been filled with workers (builders, bank clerks etc).......if they're empty it means the same people are leaving..........if they're leaving it means they have no jobs..............

These places are bargains, massive, but a lot of work as you say.

FYI - forgot to mention my own MOTHER was made redundant from an Insurance Company not so long ago..............so there you have it.

I'll keep you updated as and when I get any news

[adren]

wsn03, on Oct 13 2006, 03:41 PM, said:

Adren, these used to be called Hotels; when I was a kid the beaches were still swamped with tourists and the Island was still denying Spain was a better option...........within about 5 years the tourists vanished, and then hotels were cheap.

Over the last 15 years same buildings have been filled with workers (builders, bank clerks etc).......if they're empty it means the same people are leaving..........if they're leaving it means they have no jobs..............

These places are bargains, massive, but a lot of work as you say.

FYI - forgot to mention my own MOTHER was made redundant from an Insurance Company not so long ago..............so there you have it.

I'll keep you updated as and when I get any news

Thanks ever so much WSN03.
This is extremely useful and I would value very much any additional information.

Sorry to hear about your Mum. I hope she finds something else soon.

Re the hotels. Yes that makes sense. They all have "Hotely" names.
About 3 just popped up in Port Erin. A local Manxie just closed his Hotel training centre in Port Erin.
Has about 10 similar places so I am told although I expect he will divest them gradually.
I think he bought them en masse 10+ years ago and by the look of it hasn't so much as waved a paint brush at them since.
Great shame. Wonderful old houses.

Anyway, I whink he is "kiting" them at the moment (PropertyGuru's assessment when I described the situation and asked for input) so I am not desperate to dive in. 250K gets you 8 bedrooms, peeling paint, knackered plaster, rattling windows, naughty plumbing and mice. Wonderful houses but good heavens what a lot of work.

Re the exodus to Spain, the same effect was seen in the guest houses of Rhyl/Southport/Blackpool when I was growing up knocking around Merseyside and such places. The way each place recovered was very different. Southport did OK possibly thanks to footballer money. Blackpool OK - possibly on the up. Rhyl, however, has struggled a bit. I am hoping the Island will be a bit more resilient.

I think what I find frustrating is that there are lots of good people here who simply want to get a first place or to move a growing family up. Trouble is, the vendors all seem to be chasing money brought in by banker types who have just sold for crazy money across. And ironically, it's the banker types who I think have less affinity for the Island. Since they can afford to live wherever they want I (possibly unfairly) think they will be the first to do one when the going gets rough. I could however just be blaming others for my own situation. In fact that's exactly what I'm doing. It's fun though. Not that I am complaining. Every time I lift my chin I smile.

Cheers WSN03
Tell your Mum, I think Microgaming are hiring. Not sure what kinds of jobs though.

[adren]

GOB-SMACKED!

The three big (but extremely tatty) ex-guest house houses all went boom-boom-boom for just under asking of 250K each.
Big, OK. But damp, kanckered windows, peeling paint, tired carpets, shagged plaster, rotten exteriors, dodgy fittings and a sizeable mouse problem. 250K and what looked like 50K to make good, 100K to make nice.

Let me repeat: These are KNACKERED terraced houses in Port Erin going for 1/4 mil each after days on the market. Fscking bonkers. Even local property solicitor friend is surprised. PG suggested they were kite-flying looking for "mug punters". Looks like Port Erin has three mug punters then. I will find out if they are developers in the jungle grapevine.

I must confess, I was tempted. I even went and got a mortgage approved. Wierd psychology. I went throught the whole "might as well give up", "rates are going up, best get a fixed rate deal", "i can afford it if I 'breathe in'" mentality. In the end I simply chilled a bit. My attitude now is if someone wants to pay 250K to buy (plus expenses) and 50K to do up (more like 100K given the capacity these old places have for becoming moneypits) then good luck to them. I will just save up and wait for them to come down again. Voila, for my 250K ive got the same house, only its been refurbed.

Gah! When is it going to end?

EDIT:
The trend was downwards recently. Lots of stuff not shifting due to being overpriced. These three were overpriced considering the condition but on paper 250K these days looks like a bargain I suppose. Bloody crackers.

This post has been edited by adren: 07 November 2006 - 01:47 AM

[adren]

IOM Latest.

Prices are still high.
Houses are sticking on the market for a loooong time. Not unknown for some to be on for 2 years. Six months to a year seems to be absolutely normal for 300K+ houses (ie the majority).
Just seen a couple re-appear after a hiatus (spring time?).
A few reductions here and there.
Anything under 200 snapped up very quickly.
Anything over 500K seems to sell (wealthy individuals? sample error?)
Everything else seems to me to get stuck.

Local solicitor mentions offers at 10% under asking now the norm with more nibbled off when the survey results are known. Loads of aspirational pricing still, but these are now being found out as the genuine sellers are becoming more negotiable. Hopefully the kite-flyers will soon either get real or give up.
Local EA's annual report full of sunshine and happiness as they quote the increase last year of "average" price from 246 to 256K. 4.1%. No mention of "median" price (wonder why). BTL w4nkers at work still gung-ho. Developers still snapping up 250K dishevelled 8-bedders for conversion into... you guessed it... flats. Flats that subsequently can't be sold.

Workmate anecdotal:
Just arrived here from Cumbria Bought a house right away*.
Still keeping house (unrented) in Cumbria because "it's going up all the time".
Tells me he has 350K in mortgages. On 50K salary! I hope he hasnt seen this.

*Buying a house the minute you get to the Island is a bad idea. Best advice is to rent for 6/12 months, find a spot you like, THEN buy. Island life isn't for everyone. You need to make sure. Some love it and some certainly don't. Houses can take a long time to sell on the Island, so if you want away quickly: RENT.

On the brighter side, Castletown got beat yesterday. Happy Days!

[shaunoIOM]

Is anyone still interested in this thread and have any further views on the Isle of Man prop. market given the escalation of the problems in UK market over past few months? Where do people see the market going? Same way as UK? I would have thought the isle of man might be shielded from the UK chaos - given 1st time buyer grants, stronger econ. growth yr on yr, strong gov. budget surplus, but given the contracting credit markets and changes in lending criteria is a downfall inevitable?

[xiox]

shaunoIOM, on Apr 12 2008, 10:57 AM, said:

Is anyone still interested in this thread and have any further views on the Isle of Man prop. market given the escalation of the problems in UK market over past few months? Where do people see the market going? Same way as UK? I would have thought the isle of man might be shielded from the UK chaos - given 1st time buyer grants, stronger econ. growth yr on yr, strong gov. budget surplus, but given the contracting credit markets and changes in lending criteria is a downfall inevitable?

It'll be interesting seeing what happens to the island in the credit crunch. I suppose the impact could be quite similar to the city, seeing how based on banking the island's economy is. I don't live there, but my parents do. They're not going to be selling anything for some time. I've never lived there, so I can't really offer much insight, unfortunately. Are the mortgages there as expensive as the UK? The could be the deciding factor.

[shaunoIOM]

xiox, on Apr 12 2008, 01:58 PM, said:

It'll be interesting seeing what happens to the island in the credit crunch. I suppose the impact could be quite similar to the city, seeing how based on banking the island's economy is. I don't live there, but my parents do. They're not going to be selling anything for some time. I've never lived there, so I can't really offer much insight, unfortunately. Are the mortgages there as expensive as the UK? The could be the deciding factor.

Mortgages are as expensive here, but as I mentioned i think there are number of factors that may help to elevate at least the lower end of the market, such as the recently extended grants given out to all first time buyers.

With regards to being similar to the city, whilst the island does rely on the financial sector, i think it may be better placed to avoid the problems the city may face, given that the majority of business are based here for the tax advantages - the IOM has maintained a strong budget surplus for a long time now, and from what i can tell has the strength to maintain the favourable tax regime for the forseeable furture.
GDP growth yr on yr here is also still strong, (8% 07/08, 6% forcast for this year), and unemployment remains below 2%.

Reading the local papers etc, as far as i can see property prices still seem to be growing with strength over here, but I am not sure as to whether the level of transactions and actual selling prices are holding up.

There just doesn't seem to be any detailed analysis or commentary on the IOM market anywhere. People over here seem to think that the island will be sheltered from the worst of any crash, but i cant see this given that people have still been stretching themselves when taking out mortgages with income multiples of 5x being common place, and surely this isn't sustainable now given the reigning in of loose criteria by lenders (i presume the offshore branches of lenders are ultimately under guidance/instruction from their UK parents even though circumstances and quality of loans may be better over here...)

Any thoughts would be appreciated.

[craines]

Just noticed a rather significant price drop on a property in central Douglas:
http://www.chris-blackburn.com/site/go/vie...ropertyID=63561
Although I don't think it is much of a guide to the market on the Island as anyone could tell it was way overpriced.
I have seen it listed since around the start of 2007, but may have been longer perhaps up to 18 months. It originally had a price of (I can't remember exactly, other than being shocked at it) of around £745k maybe even £785k. Now it's down to £685k -- a significant drop.
I personally think it is still madly overpriced -- yes it may be at the top of the building (and it is great central location) but I wouldn't call it a "penthouse". More like an loft-space apartment with only 2 largish windows out to the sea/prom views.
This one should probably be put into the category of "EAs over-valuation just to get the listing".

[shaunoIOM]

Article on iomonline.co.uk a week or so ago, part of a larger article in latest issue of money media... Comments anyone?

Quote

WITH house prices in the UK in a tailspin the Island's residential property market appears to have escaped the effects of the global credit-crunch.
But will Manx homeowners continue to remain immune to the crisis that is gripping Britain's housing market?

Local commentators are optimistic but caution that nothing can be certain in the current international economic climate. The key factors working in favour of the Island's residential market are the strong economy and the shortage of homes for sale.

Unlike the UK there has been no increase in property repossessions and some Island banks continue to offer 100 per cent mortgages.

Mortgage lending criteria in the UK have tightened dramatically in recent weeks.

According to the Nationwide's measure, house prices in the UK are now 1 per cent lower than this time last year, taking £1,759 off the average price of a home in Britain, which is now £178,555. The last time house prices fell year-on-year in the UK was March 1996.

On a monthly basis, the average price of a home fell by 1.1 per cent in April, twice as severe as economists had expected. That ratcheted up the pace of decline and represented the sixth consecutive monthly drop in prices.

Stephen Carse, the Manx government's economic adviser, said that in the 12 months up to the end of March this year, property prices in the Island have risen by 12 per cent on average.

This calculation is based on figures provided by the registry, excluding very highly priced houses, and all apartments and flats. During this period the average house price has increased from £242,700 to £272,000.

In the 12 months up to the end of March 2008, 1,582 sales were recorded. This compares with 1,386 sales during the corresponding previous 12-month period.

Mr Carse attributed the soundness of the property market to the Island's robust economy. 'As long as the economy remains strong the housing market in the Island should be fine irrespective of what happens in the UK.' He added that there was a net inflow of migrants to the Island which increased demand for property.

Graham Wilson, a director of Cowley Groves, noted that property prices in the Island have increased by 175 per cent over the past decade and by 52 per cent over the past five years.

'Consequently, even if property values do fall - which is highly unlikely in the short term - today's local property owner is unlikely to be affected by negative equity particularly as we also have falling interest rates. The cost of living here is obviously rising and utility bills have soared but interest rates are still low so as long as our employment situation doesn't change drastically.'

Mr Wilson said that during the first four months of 2008 his firm had experienced 'absolutely no reduction in local activity either from a sales or a new listings point of view.

'Locally, mortgages are still obtainable and although some lenders are changing their lending criteria and in some instances increasing arrangement fees and fixed rate fees, 100 per cent loans can still be provided.'

Mr Wilson added: 'Of course if the global situation gets much worse it is inevitable that there will be some effect on the local market.

'A depressed UK market will obviously mean that if UK buyers wanting to relocate to the Isle of Man are unable to sell they are unlikely to relocate and purchase here.

'However, due to the fact that over 80 per cent of our market is made up of locals as opposed to purchasers from UK and overseas this effect, in my opinion, is likely to be minimal by comparison.'

Shane Magee, a director of Chrystals said the fact that the Island has a higher proportion of cash purchasers compared to the UK and the absence of capital gains tax has helped ensure that the Isle of Man is not suffering the same plight at the UK.

He estimates property prices in the first quarter of this year rose by about 5 per cent.

[wsn03]

shaunoIOM, on May 13 2008, 09:14 PM, said:

Article on iomonline.co.uk a week or so ago, part of a larger article in latest issue of money media... Comments anyone?

Looks like the usual VI tosh to me. Trouble with the Isle of Man is the media is not really independent, so doesnt ever report bad news.

Why should the Isle of Man be immune? There will be some slowdown in finance, affecting some jobs held by Manx locals. Interest rates will be affected by British bank rates wont they, so the same situation as here - people up to their necks in debt, inflation rising, rates rising...........why should the Manx be able to afford to ride that situation better than the mainland British?

The Island has some quirks that shield it from various side effects of the UK economy, but at the same time it is exposed to some other threats (e.g. the determination of Europe to make life difficult for tax havens etc), so can go from safe haven to crash town quickly, saw it as a resident there in the 70s and 80s.