The Land Registry have recently released the latest set of figures for the Colchester Property market which makes interesting reading. House prices across England and Wales stalled in May with no rises in the average value of a home during the month, according to the Land Registry. The average property price is now £179,696, according to the latest monthly index, with annual growth across England and Wales of 4.6 per cent, which is the lowest for 15 months. Last month, the average house price stood at £179,817 and the month before that £178,007 This is in stark contrast to the same point last year.
Last summer, annual rises hit 10 per cent across the UK – with London seeing yearly growth of 20 per cent. The regions with the most significant annual price increases are London and the South East with a movement of 9.1 per cent. Interestingly for those of us involved in the Colchester property market, the East and North East experienced the greatest monthly rise, both with a movement of 1.6 per cent, while Wales saw the largest monthly price decrease with a fall of 1.7 per cent.
So what does all this mean for Colchester landlords or those considering dipping their toe into the buy to let market for the first time? For many people, buy to let looks like a very good investment, providing an income stream at a time when bank interest rates are low and without the ebbs and flow of the stock market.
When we compare Colchester against the regional picture, East of England property values rose by healthy 1.6%, leaving them 8.8% higher than a year ago. This is good news for local homeowners who were affected by the downturn after 2007 and still find themselves in negative equity.
Rents also continued to improve for all types of Colchester properties during the past year and this shows no sign of abating. The shortage of two, three and four bedroom properties in all key areas is driving tenants to snap up the better quality properties, often within just a few days of being listed. At long last the majority of rents are back to similar levels and in some cases are now higher than in 2007.
However not all areas of the town are experiencing the same strong demand. For example the huge increase of new build apartments and student “units” in the Hythe have lead to an oversupply in that area and consequently rents have flat lined this year. Next month Colchester will see the completion of a further 700 student units at the Hythe, which will undoubtedly leave some landlords competing for tenants in the run up to the start of the new university year. This may prove to be a temporary blip as the university continues to grow year on year, but for the time being I no longer recommend the Hythe area for potential buy to let investments.
If you are considering buying a property to let in or around Colchester and want to pick my brain or just have an informal chat, please call or e-mail the details to me. Alternatively if you see a potential investment property and would like a second opinion, just email the Rightmove or Zoopla link to: firstname.lastname@example.org
Alternatively feel free to give me a call on 01206 862288
Author of the Colchester Property Blog, Property Investor & owner of Home Lettings