Wednesday 31 December 2014

What will this year's property trends be in Chelmsford?



I had an interesting chat with a landlord who uses another letting agent in the City after he popped into our offices for a coffee whilst his wife was taking advantage of the early sales. We got talking about the Chelmsford property market and thought other landlords might be interested.

You see, property values didn’t start leaping forward in Chelmsford until January 2013, so after a strong run over the last 20 or so months, the ever upward drive of house price rises has started to turn with increases now at an almost standstill for the first time since the start of 2013. Now it could be said this easing of the housing market in Chelmsford can be attributed partly to the time of year (last year property values in Chelmsford CM1 dropped by 0.8% in December, but Jumped to a 12% increase in Jan / Feb 2014), it is obvious that estate agents in Chelmsford are wary about the direction of the market as a result of the not as strong demand and fewer house sales.

With the uncertainty of a possible interest rate rise, new mortgage rules, a general election on the horizon and recent warnings of a house price bubble. Although the main indicators suggest that buyers will start to gain the upper hand, especially with the new stamp duty rules announced recently by George Osborne. However, there are many homeowners who don’t need to sell and won’t bother unless it’s economically beneficial to do so, but most homeowners are homebuyers, so what they lose with one they gain with another.
This is all good news for landlords looking to buy rental property with the changes in stamp duty and later in 2015, the new rules regarding pensions, where you will be able to take money out of your pension pot to invest in property. However, at the same time, I would say don’t just buy any old property in Chelmsford. First time landlords need to be cautious. The doubling of house prices every seven to ten years which has taken place since WW2 doesn’t seem to have been seen since the mid 2000’s. The property market is shifting with more properties being built and restrictions put on mortgage lending, the likelihood of the property market increasing at the same levels as the past are questionable. But investing in property is also about receiving the rent.

On the one hand going for high yielding Chelmsford property to rent out seems an obvious choice, but high yielding property often doesn’t go up in value that well and in some circumstances doesn’t keep up with inflation, meaning in real terms you have a depreciating asset (I spoke about this a few months ago in ‘The Chelmsford Property Blog’ when comparing Westlands to Old Moulsham). So surely you should pick a property that has great capital growth then, because of the obvious potential to generate long term capital profit, especially with inflation eating away at our savings. However, rental yields on high capital growth properties (in areas such as Old Moulsham, Beaulieu Park & Chancellor Park) tend to be low, meaning if you are taking a high percentage mortgage, the rent doesn’t pay the mortgage payments.

That is why in the New Year, due to the demand, we will be running a number of informal Landlord Workshops for new and existing Chelmsford landlords, irrespective of whether you are a self managing landlord (ie you do it all yourself), landlords with other agents, people who are thinking of becoming a new buy to let landlord in Chelmsford for the first time in 2015 and finally our landlords that already let us manage their properties.

May I take this opportunity to wish you all a very Happy New Year.http://feeds.feedburner.com/~r/TheDerbyPropertyBlog/~4/vJ3_ruKgDsI?utm_source=feedburner&utm_medium=email

Tuesday 23 December 2014

What will the property investment market be like in Chelmsford in 2015?



A number of landlords, who own property in Chelmsford, have made contact with me recently asking for my thoughts on the future of the buy to let market in Chelmsford. In previous articles, we have talked about Chelmsford’s history of rents, property values, tenant demand and yields; all important matters for a landlord, but we haven’t discussed the future.

Property values rose by 6.37% (Dec 13 to Dec 14) in Chelmsford. Good news all round, but when you consider how property values in the city have previously performed in the last 5 years, this is not as good as the media would have you believe. The figures show that between Dec 2012 & Dec 2013, there was a 6.12% increase, between Dec 2011 & Dec 2012 an increase of 0.67%, between Dec 2010 & Dec 2011 a increase of 2.11% and finally between Dec 2009 & Dec 2010 a decrease of 0.11%!
It should be no great surprise to hear that Chelmsford property values are starting slow up as we head in to the New Year. Property values in the city were growing at a rapid rate in the early part of the year, but since October they slowed by a mere 0.01% increase.

The reality is that we have had a year and a half of decent market conditions in Chelmsford, but now all that pent up demand is starting to fade. The big question moving forward is whether the Chelmsford market will now be held back by affordability and restricted mortgage lending, and what long term impact this will have on the Chelmsford property market.

Looking at the UK as a whole, because we can’t look at Chelmsford in just its little own bubble, the recent rapid rise in house values in some parts of the UK in the early part of the year (especially in London), along with earnings growth that remain below inflation and the possibility of an interest rate rise over the coming months, appear to have tempered housing demand. This weakening in demand has led to a modest easing in both property price growth and sales. A moderation in growth looks likely into next year as supply and demand become increasingly better balanced.

Now with the General Election on the horizon, whichever Government takes power, they, along with the Bank of England, have a thorny job to do in balancing the expected rise in interest rates with the continued resurgence of the housing market, to ensure the property market doesn’t drop and drag down the economic recovery forcing people into selling their property at a loss.

However, back to Chelmsford; Long term property values which track peaks and troughs are more helpful to landlord investors. The questions I seem to be asked on an almost daily basis by landlords are:-
“Should I sell my property in Chelmsford, or even buy another?”
“Is the time right to buy another buy to let property in Chelmsford and if not Chelmsford, where?” 
“Are there any property bargains out there in Chelmsford?” 

Many other Chelmsford landlords, both who are with us and many who are with other Chelmsford letting agents, like to pop in for a coffee to  discuss the Chelmsford property market, how Chelmsford compares with its closest rivals (Colchester, Ipswich, Brentwood etc.), 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. Please email me at
stephen.frost@martinco.com or call me on 01245 330500!

In the meantime may I take this opportunity to wish you all a very Merry Christmas and a prosperous 2015.

Monday 22 December 2014

Christmas Jumper Day

Not long Now...

Us as Martin & Co are getting festive tomorrow, donning our Christmas jumpers and other festive get-up to dish out festive treats to the public of Chelmsford.

Stop by for a mince pie, plus other nibbles at our office 15 Duke Street, CM1 1HL.



Who said Christmas was coming in Chelmsford?


Christmas may only be 3 sleeps away now, but I don't think people have got the memo! We were so busy on Saturday with potential landlords coming in and asking for our advice on where to buy. 

This property here is one I have been showing to people, so thought I would share it with you. It's just come on the market and is being sold with a tenant in place, a nice little ready made investment, ripe for the picking, which could generate you a 5.4% gross yield from the get go. 

It's on the market for £137,500, with another added bonus of being close to City centre... with parking! The tenant in there is currently paying £625pcm, the tenancy runs until April 2015

This property will not be on the books for long, so if you are interested, let me know and we can sort out a viewing for you. 




Friday 19 December 2014

Brilliant, Baddow house




Now, I might be taking a bit of a risk with this property because there are no internal photos, it could be just because the agent hasn't been able to get in there, or it could be because it is a dump! I'm hoping it's not the latter . 

These cottages are very popular for rentals as the location is great. We would expect this to rent in the region of £875 pcm. 

It has just come on the market for £199,995, which is priced realistically in my opinion, of course, it's always nice if you get a little bit off the asking price, although this is getting trickier now.

If the figures all work out, this would gross you an annual return of 5.2%, which for a chouse,. close to city centre, is pretty good. 

If you would like any information on how to go about searching for a buy to let property, pop in and see me in our office on Duke Street

Thursday 18 December 2014

Come and Join Us...

Martin & Co Chelmsford are having a 'Christmas Jumper' Day on the 23rd December at our office on Duke Street. Whether you are a landlord or tenant, seller or buyer, or someone who has just got the munchies at lunch time,  it is open for all to come and have a mince pie, glass of wine and some good ole Festive cheer!

We are doing this in aid of Agents Giving, who work with the industry to help support charities and communities across the UK.  http://agentsgiving.org/ 

We'll be dishing out between 11am - 2pm, come along and join in, we may even sing a Christmas Carol or two!


In Chelmsford, semi’s account for 27% of property sales. Is that good?



Chelmsford attracts all sorts of property hunters seeking a home in our city and strikes a wonderful balance between old and new. Fortunately, just about every accommodation preference can be catered for, from highly desirable detached houses , as well as popular 1930’s bay front semi detached houses, late Victorian terraced houses and modern luxury apartments dotted around the City.

However, with newspapers and the media giving mixed messages on what is exactly happening in the City, let us have a look at what has happened over the last 12 months, in particular, what type of property is actually selling.

Between November 2013 and November 2014, 2323 of the 71,247 properties in Chelmsford actually sold. The best performing type of property was, the semi detached house. 634 semi’s were sold in the last year, with an average sale price of £286,870, representing 27.3% of the property sold in Chelmsford (which when you consider only 31.4% of Chelmsford property is semi detached, this means they have done well).

In very close second are detached houses. They represented 26.8% of the sales, but then detached houses only make up 29.8% of the property in Chelmsford... again good news for all detached house owners.

Of the 14,576 terraced houses in Chelmsford, 573 changed hands in the last year, showing that whilst 20.5% of properties in Chelmsford are terraced houses, they only, but very respectably, represented 24.6% of the sales.

However, it is the flats/apartments that seem to have performed the worst (although not by much). Whilst there are 12,757 apartments in Chelmsford, (representing 17.6% of the housing stock). Only 492 changed hands in the year, representing 21.1% of the sales.

What does this mean for the property owners of Chelmsford? It means that there is a fairly even property market in Chelmsford. Most homeowners start with a terraced, aspire to move to semi detached houses, then as finances allow, they move to a detached property. The majority of apartments, especially in the city centre, may have been purchased by landlords to rent out to tenants, so they have no need/want to trade up on the property ladder., which is why these sales are a lower percentage compared to the others

However, in general, the Chelmsford property market is in full swing and ‘negative equity’ is becoming a distant memory. We are seeing some good sales and if you look hard enough, you may chance upon a "hidden property gem" in the most unlikely of places.

If you would like to discuss anything further then please pop in and see me in our office on Duke Street