Interview with Mark Grace, Director of Black Grace Cowley
By: Liz Corlett
30 November 2008
What is the health of the Island’s property market relative to that in the UK?
Having now worked through two or three slow periods in the Island’s property market over the last 25 years, this fall-off in confidence is probably the most severe I have yet witnessed, however, many of the features of the slowdown are very much similar to those in previous difficult periods. In particular, the effect on residential values on the Isle of Man has been extremely limited so far. Transactions have certainly reduced, however, compared with the severe drops in value being experienced throughout the UK market, we are extremely lucky that the local market has proved to be an awful lot more robust with little or any change in actual values. Part of this will be down to the strong level of employment on the Island, so vendors are not pressurised into selling at low values, but also local home owners tend not to be as highly geared as many of their UK counterparts who took out 100% plus mortgages, and overextended themselves, particularly through the buy to let market.
How much do you expect values to alter in the next twelve months?
For the foreseeable future, I would expect the market on the Island to remain fairly stagnant with limited growth, increasing numbers of properties on the market, and little change in values. Once confidence returns, this will provide a much greater choice for prospective buyers seeking new homes, who for the last five or six years have been faced with very limited stock on the market.
On a similar note, can you speculate as to how mortgage rates will behave in the next twelve months?
The question of interest rates is obviously very much a moving feast at the moment, however, we have now reached the lowest levels I have seen in my career, and the strong indications are that interest rates will fall further over the next six to twelve months. As we are now seeing for the first time in many months, the level of LIBOR coming down, the expectation is that the banks will now start to lend to each other, and as confidence grows between the banks, it is hoped that confidence in the property market will also increase, and purchasers will go out and benefit from possibly the lowest mortgage rates they are likely to see in their lifetimes.
Are there property laws and regulations which are unique to the Isle of Man and if so, how do they affect the market?
Many people coming to the Island for the first time don’t realise that the Isle of Man is a self-governing Crown Dependency with its own legal system and Government. There are no restrictions on relocation to the Island, other than those under the Immigration Act, which apply equally in the UK, and there are no restrictions on buying property here either. What new residents need to be aware of is that local advocates (lawyers) are required to act on your behalf in property transactions, however, the general structure of a property purchase with an initial exchange of contracts followed by an agreed completion date is much the same as the system in England. All of the main high street clearing banks are represented locally to deal with mortgage applications.
To some minds, jurisdictions such as the Channel Islands are now overcrowded. What kind of growth do you think the Island can sustain in the next ten years?
I believe that one of the great advantages of the Island is the fantastic amount of open space and countryside we enjoy here. Having visited Jersey and Guernsey, I was astounded to find two Islands with equivalent or larger populations on significantly smaller islands. Jersey has over ninety thousand people but a land area only one fifth of that on the Isle of Man. With such a large amount of open space and countryside on the Island, there is the potential to increase the population over the coming years, however, we do have a strong planning department to ensure development and release of green land is carefully controlled and well thought-out.
How much new building does the Island see each year, and where is the greatest concentration?
The current slowdown in the market has obviously limited the amount of new development coming out of the ground, however, over recent years we have seen significant developments not only around Douglas where approximately one third of the population live, but also around the outskirts of Peel on the west of the Island as well as new developments in Ramsey in the north and around Castletown in the south. Although office and business premises are very much centred around Douglas, the provincial towns around the Island also have busy commercial centres.
What is the volume of commercial property on the Island?
The Isle of Man has a tremendously successful offshore finance industry, offering new residents good jobs, an exceptional quality of life, and a successful and progressing economy. There is an attractive taxation strategy for both individuals and companies and an extremely well regulated business and finance sector. The result of the Island’s success has been the development of over one million square feet of modern office accommodation, particularly concentrated around Douglas town centre. There are also a number of new developments on the horizon, and the commercial property market for both occupiers and investors has proven extremely robust and successful even over the last difficult twelve months.
Do you provide relocation services?
The estate agents on the Island, including Black Grace Cowley, tend to be traditional multi-disciplined firms offering the full spectrum of property services. Most are well skilled in providing new residents with all the necessary advice, not only in regard to finding a suitable home or place of business, but also in respect of the overall transition to what is effectively a new country, and all that this entails. I very much believe that the service offered locally is still very much based on individual attention and a very high level of personal service, which is often absent from the modern large UK practices.