According to the Land Registry’s latest House Price Index for Colchester and the surrounding locality, the value of Colchester apartments and flats are rising at a faster rate than terraced and town houses, semi-detached properties and even detached property.
Over the past year Colchester apartments and flats have increased in value by 13.63%, which is 1.48% more than the Colchester average increase of 12.15% and proportionally 12% higher. It’s the first time since Spring 2003 that Colchester apartments and flats have outperformed all the other property types by such a wide margin. Here’s the performance statistics for other Colchester property types:
- Detached homes rose by 11.80%
- Semi-detached homes rose by 11.49%
- Terraced/Town-Houses rose by 11.93%
This moderately increasing rate of property value growth is opportune but rather than being an indicator of a vibrant and healthy Colchester property market it’s more a reflection of the long-lasting shortage of properties on the Colchester housing market in general. I have written about the lack of homes for sale in Colchester on many occasions in Colchester Property Blog posts and although the current situation isn’t as bad as this time last year the choice for buyers remains limited.
Colchester Average Property Value Is £308,000
This breaks down into property types as follows:
- Colchester apartments and flats at £172,500
- Colchester detached houses at £445,300
- Colchester semi-detached houses at £275,100
- Colchester terraced and town houses at £235,300
Why Have Colchester Apartments Performed So Well? Is it Just a Colchester Thing?
Looking at the Land Registry figures nationwide apartments are the leading property type. There are 379 UK local authority areas and the value of apartments is rising faster than detached, semi-detached and terraced houses in 320 areas, which works out at 84%, so it’s not just a Colchester thing.
Before Colchester apartment owners open the Champagne I should point out Land Registry figures are notorious for short term fluctuations. Over the last six months the Land Registry has frequently made downward revisions to their first published House Price Index figures. Against that backdrop it’s hard to believe Colchester house values rose quite so rapidly last month, so maybe keep the Champagne on ice for now.
The larger picture based on information from the Council of Mortgage Lenders (CML) stated home buying activity last month was up 2% compared to the same month in 2016 which is good news given we’ve had Autumn, Winter and now Spring since Brexit. The CML stated first time buyer’s levels of affordability was being squeezed and that the average amount borrowed by those first-time buyers dropped slightly last month, but the overall amount borrowed (by all buyers) was an impressive 12% higher than the same month in 2016.
What Next for the Colchester Property market?
I think the uplift in the values of Colchester apartments is likely to be a short-term blip rather than a longer term trend. The real issue is likely to be continued upwards pressure on inflation due to the ongoing impact of the lower exchange rate for Sterling. If the gap between inflation and wages continues to widen wages will be lower, in real terms, which will dampen demand in the Colchester property market. With property values already high it’s unlikely we’ll see a continued increase in house price growth in the medium term.
My gut feeling is the Colchester housing market may be headed into the calmer waters we experienced during the mid 1990’s with steady demand, met by steady supply, and relatively steady house price growth. If I’m right, with everything else happening in the world today, “steady as she goes” would be a good place to be, subscribe for further updates.
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