Colchester 3 Speed Micro Property Markets

Colchester 3 Speed Micro Property Markets

One of the most frequently asked questions anyone involved in the local property market hears is “What’s happening to the Colchester Property Market?“. It’s an easy conversation starter but having answered the question so many times and bearing in mind my penchant for research I’ve come to the conclusion there isn’t just one big Colchester property market but instead there are many small micro property markets.

According to recent data released by the Office of National Statistics (ONS), I have found at least three micro property markets in Colchester have emerged in recent decades. For easy reference I’ve called them:

  • Lower Colchester Property Market.
  • Lower to middle Colchester Property Market.
  • Middle Colchester Property Market.

The Lower and Lower to middle sectors of the Colchester property market have been fuelled over the last few years by two groups of buyers. The first group, making up the clear majority of those buyers, are cash rich landlord investors who are throwing themselves into the Colchester property market to take advantage of tempting low prices and even lower interest rates. The second group of buyers in the Lower and Lower to middle Colchester property market are first-time buyers (FTB) despite the FTB market being crippled by the 2014 stricter mortgage affordability regulations and ever fewer mortgage deals offering low deposits. I have classified the three sectors as follows:

  • Lower Colchester housing market – the bottom 10% (in terms of value) of properties sold.
  • Lower to middle Colchester housing market – lower Quartile (or lowest 25% in terms of value) of properties sold.
  • Middle Colchester housing market – which is the median in terms of value.

Looking at the figures for the Colchester Borough Council area you can see the three different sectors (Lower, Lower to middle and Middle) each performed differently.

Colchester Properties: SOLD PricesPrice Paid in 1995
Price Paid in 2017
Percentage Uplift
Lower (Bottom 10%)£32,500£130,000300%
Lower to Middle (Lower Quartile)£41,000£170,000314.63%
Middle (The Median)£62,288£261,359319.60%

changes in house prices paid between 1995 and 2017
Of the three Colchester micro property markets you can clearly see the Middle Colchester market has performed the best.

percentage uplift

As you can see the worst performing sector (with the lowest percentage uplift) was the Lower Colchester housing market. Interestingly, if we applied the best percentage uplift figure from the Middle Colchester Property Market percentage uplift to the 1995 Lower Colchester Property Market housing figure, the 2017 figure of £130,000 would have been £136,370.

I haven’t analysed the upper reaches of the Colchester housing market because the lower and middle markets is where most of the buy to let investment landlords buy property and where the majority of property transactions take place. Also, the unique and distinctive nature of Colchester’s up-market property scene, where every property is different and they don’t tend to sell as often as the lower to middle market, it’s much more difficult to calculate what changes have occurred to property prices in that part of the Colchester property market. Looking at the stats for the up-market Colchester property market from Land Registry, only 14 properties in Colchester (and a 1 mile radius around it) have sold for £1,500,000 or more since 1997.

What Do Colchester Micro Property Markets Mean For Homeowners and Buy To Let Landlords?

Micro property markets exist and there are many Colchester micro property markets. Identify them for yourself and track trends and you should be able to spot the bargains. Even in this market, I have spotted a number of bargains over the last few months that I have shared with my Colchester Property Blog readers, especially in the Lower and Lower to middle markets. If you would like to be kept informed of buy to let bargains please subscribe to my blog so you don’t miss out.

I’d love anyone who spots other Colchester micro property markets or picks up a bargain in Colchester as a result to let me know. Add your comments below or email grahamwood@hometorent.co.uk. Alternatively give me ring on 01206 862288 to discuss any aspect of the Colchester property market.

2 thoughts on “Colchester 3 Speed Micro Property Markets

  1. http://www.rightmove.co.uk/house-prices/CO2-8GE.html

    Hi graham in regards to property prices the above link shows price history back from 1995 sold prices to date
    What’s worrying is stagnation . Most of the properties above are sought after by Investors . I was wondering why the prices have slumped they seemed to have peaked around 2012 /13, the same
    Sought of price today? Is this because they are not selling ? What’s your prediction on specifically quayside drive today . Some show capital growth of around only 15k in ten years… Would this be a good buy to let area and how would you predict price growth as above. I would be most grateful if you could share your expertise in this area . Kind regards Joe.
    .

    • Hi Joe. Thanks for getting in touch. When the Quayside area was developed it added a large number of similar properties to the buy to let market in a very short timescale. During the same period, equally large developments of flats were being built in other areas of Colchester including Highwoods and the Garrison. Colchester became one of the fastest growing towns in the country. At this time the criteria to qualify for a buy to let mortgage was much more relaxed than today, which encouraged many inexperienced individuals to get involved in buy to let for the first time. Many of those individuals never visited Colchester to carry out their research but placed their trust in so-called property clubs which negotiated prices for bulk buying of properties off plan. This became a bandwagon which many folks blindly hopped on board without realising that they had paid way too much.

      10 years later Quayside continues to be in very high demand by second and third year students who have completed their first year in halls. Rents have continued to rise in the area as have property prices. If you are going to buy a property in this area make sure that you complete in time to capture the new intake which starts to arrive in September. Feel free to call or e-mail for a chat if you would like to discuss.

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