The ‘Liquorice Allsorts’ Colchester Property market

Despite the UK economy heading in the right direction with record low mortgage rates and unemployment  figures dropping,  the rate of property prices rising in Colchester have tempered since the start of the year. This slow but sure downward trend in the rate of growth has been in evidence since mid-2014.  Property value increases continue to outpace the growth in salaries, however the gap is closing, helped by a lift in salaries over the last 6 months.  Property values in the East region as a whole are 8.8% higher than a year ago.  Compare this to the neighbouring regions of the South East at 9.1% higher and the East Midlands at 2.9%, the majority of the country continue to see annual house price gains - the exception being Wales which recorded a slight  decline of -0.6%.

Even with the tempering in house price inflation, it does not necessarily change my outlook that property prices are likely to be firmer over the second half of 2015 amid heightening activity in the Colchester property market. As stated in a previous article, there is a current shortage of properties on the market, restricting supply, which in turn will provide stability and support to Colchester property prices. Therefore, my overall opinion is that Colchester property prices will rise by 6% over 2015 and roughly the same in 2016.

Property investment is a long term business. Buying the right sort of property is vital. I have recently been speaking with a number of Colchester landlords about the importance of a balanced portfolio, when buying and renting out property. The balance between buying properties that offer good monthly returns (high yields) but quite often offer poor capital growth (i.e. they don't increase in value that much over the years compared with the average) verses properties that do go up in value quicker but often offer a lower yield.  So, what type of properties have performed best over the last few years in Colchester, especially in terms of their capital growth?

When comparing what the average price of detached, semi detached, terraced and flats were selling for back at the start of the Millennium to the present. The results are quite remarkably different, almost like a bag of Liquorice Allsorts, as the different types of property have performed poles apart over the last 15 years:

•          Detached Houses in 2000 were selling on average for £133,087 and so far in 2015, they have been selling on average in Colchester for £342,627 a rise of 157%
•         Semi -Detached Houses in 2000 were selling on average for £79,992 and so far in 2015, they have been selling on average in Colchester for £223,689 a rise of 180%
•         Terraced Houses in 2000 were selling on average for £63,025 and so far in 2015, they have been selling on average in Colchester for £193,398 a rise of 207%
•         Flats and Apartments in 2000 were selling on average for £54,292 and so far in 2015, they have been selling on average in Colchester for £129,212 a rise of 138%

Moving forward, what should new and existing buy to let landlords do with this information?  Well, the questions I seem to be asked on an almost daily basis by landlords are:

• “Should I sell my property in Colchester?”
• “Is the time right to buy another buy to let property in Colchester and if not   Colchester, where?”
•  “Are there any property bargains out there in Colchester to be had?”

Many other Colchester landlords, who are with both us and other  Colchester letting agents, like to pop in for a coffee,  pick up the phone or email us to  discuss the Colchester property market, how Colchester compares with its closest rivals (Braintree, Ipswich and Chelmsford), and hopefully answer the three questions above.  I don’t bite, I don’t do hard sell, I will just give you my honest and straight talking opinion and look forward to hearing from you.