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Page last updated at 13:26 GMT, Thursday, 20 January 2011
Why are house prices on the Isle of Man so expensive?
Aerial shot of Douglas
New housing projects must include affordable housing under government rules

Getting your foot on the bottom rung of the property ladder in today's economic climate can be an uphill struggle.

The average house price on the Isle of Man is over £270,000, nearly double the North West average, and beyond the reach of many first-time buyers.

Andreas Nabor, an economist at the International Business School said:"To increase the building of affordable housing means raising taxes."

"You will always have shortages to deal with in this kind of market," he added.

Nabor says there are a number of island factors that keep prices high.

"It's a question of supply and demand. We are living on a small island that is only 221 square miles big and there is limited supply of land," he said.

Luxury developments

BBC Isle of Man asks people their thoughts on Manx house prices

"Then we have the demand side, our population has increased by 12% over the last 10 years. In the UK that compares to 5%. Income has also increased twice as fast as in the UK. These factors all increase prices," added Nabor.

Government statistics show that the average price for a house in 2010 was £289,532, that's a rise of nearly £30,000 since 2007. Renting is not much cheaper averaging around £1000 a month.

High prices and the increasing number of new, luxury developments aimed at the business community, have sparked fears amongst some young people that they are being driven out of the property market and the island.

Aspiring home owner, 19-year-old Stephanie Spencer said: "It's really difficult for people my age to move out of home."

Average House Prices
Isle of Man - £271,000
Blackpool - £91,000
Cumbria - £131,000
Merseyside - £115,000
Lancashire - £118,000
Source: IOM government and The Land Registry

"If you want the quiet life here you have to pay that little bit more, but there are a lot of people who have moved over to England now because of the prices here."

Rising prices

To help combat the problem, Tynwald has approved an extra £2.8 million pounds this month to fund the House Purchase Assistance Scheme, which involves building affordable housing and offering grants and loans to first- time buyers.

The scheme, said to be one of the most generous in Europe, has helped over a thousand people since it started ten years ago.

Supporters of the scheme say it is helping to address the shortage without artificially rising prices.

Nabor said: "The government has kept first time buyer's grants stable for a long period of time with house price inflation in mind.

"It is a balanced policy of helping young people purchase a house and, on the other hand increasingly supply."

But not everyone is convinced, first time buyer Hannah Cowin from Douglas found the scheme "too restrictive" for her needs.

Building site
Some say building should be restricted to protect the island's natural beauty

Very restrictive

Instead she spent three years saving up for a deposit for her first property.

"You have to buy within a price range of £150,000 and that is very restrictive in itself.

"They look at you as a person and if you are a single person they look at putting you in a one bedroom apartment for ten years."

"In that time you could get a family together and have children, and that size property isn't going to be sufficient," added Cowin.

However the popularity of the scheme speaks for itself with currently 1015 people on the First Time Buyers register looking for the right property to come up.

Scenic views, low crime rates and a vibrant financial sector mean that the Isle of Man is set to continue to be one of the most desirable and expensive places to live in the North West.




SEE ALSO
Government boosts first-time buyer scheme
18 Jan 11 |  Isle of Man
'Mixed picture' for house prices
04 Nov 10 |  Business
House prices will 'stabilise again'
31 Dec 10 |  Business
Rents 'rise as house prices fall'
19 Oct 10 |  Northern Ireland
Will house prices fall in 2011?
24 Dec 10 |  Business

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