Colchester is just an hour’s journey by train from London, which makes it a great place for commuters to buy. And as people working in London tend to have higher than average salaries and improved job opportunities, this tends to help keep Colchester and Essex property prices and rents buoyant. So does this make it a good place to invest?
Essex properties 16% higher than UK average
At present the average price of a property in Essex is £212,000 compared to the national average of £178,000. Prices increased by nearly 10% in the last twelve months alone! With rents ranging from around £750-£1,000, these are up too by 8.8% year-on-year in the East of England and yields are similar to 2014, averaging 4.3%. So on the face of it, investors could expect to do pretty well in Colchester and Essex.
How do the longer term prospects look?
Given that property prices nationally rise by about 6% per year, the slightly higher 6.3% growth in Essex looks quite promising. And although it was not good news, the 18% tumble that house prices suffered in the recession was no worse than national figures, and actually prices have now recovered faster than elsewhere in the UK. House prices are now just about level with the peaks of 2007/8. On this basis, Colchester and Essex look to have potential for continued, long-term growth in both rents and property prices.
How easy is it to find a discounted property?
Given the current success of Colchester’s property market, getting your hands on discounted property can be that much more difficult. It’s also important to recognise that different properties in different micro-areas of the town may not be that attractive in terms of price growth or profit. For example, a city centre two-bedroom terrace would cost £150,000-£160,000 and rent for around £650 monthly. Subtract three weeks of voids and you have a yearly income of £7,350, e.g. lower than 5% yield. Some cash investors have lost out on properties that saw little or no price growth in the last decade.
Be prudent and get some professional advice
You can invest wisely in Colchester, providing you do your research and also get specialist advice from people who know the market. If, for example, you’re looking into university accommodation, or perhaps renting out a new build to young professionals, there’s plenty of stock. You can get a respectable yield of 6-7% on houses and flats, while there is always a chance of finding just the right property in the right sort of area that offers even better financial prospects.
Come and talk to me about future investment in Colchester!
For a more detailed analysis of the current picture, plus an up-to-date forecast on investment prospects in this area, do come along to my seminar at the Landlord Investment Show on Thursday, 5th March. It’s at 2.30 pm in the Weston Homes Community Stadium and I’ll be delighted to see you there!
For more help on buy to let and property investment, take a look at some of our FREE buy to let checklists:-
Buy to let quick guide
Choosing a letting agent
Analysing a buy to let
Financing buy to let
Buy to let tax