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