Thursday 10 March 2016

4,272 Chelmsford Homes bought by private landlords in the last 20 years – Is this the end for first time buyers?

There I was, out with the family at Tropical Wings Zoo last weekend, when a smart gentleman approached me. ‘Hello’, he said, ‘You are the person writes that Property Blog aren’t you? We have met before at that Business Networking event in Chelmsford a few months ago’. I did then recognise him and, whilst I wont mention his name, he runs a small but perfectly formed well known independent retailers in the city ... It’s amazing who you see when out walking! Anyway, I was at a loose end for five or ten minutes as the other half was sorting things with the family, so we had a chat.

He wanted to know my thoughts on the future of the Chelmsford property market, and I would now like to share with you that conversation, my Chelmsford property Blog reading friends. People are always going to need a roof over their heads and somewhere to live will never go out of fashion – it’s a necessity for every single person. The 22 to 30 year olds of the city have a choice to what type of roof they have ... they rent from the Council, they can rent from a private landlord or finally they can get a mortgage and buy one. In the 1970’s/80’s and 90’s, the expected thing was to save like mad for two years for the deposit (going without luxuries) whilst living at home or renting a cheap two up two down, then buy your first house. However, more recently fewer Chelmsford youngsters have been buying, choosing to rent instead – mainly from private landlords (as Councils have been selling off council housing on the Right to Buy Schemes). The numbers are truly staggering ... and I want to share them with you.

Roll the clock back 20 years and Chelmsford was a different place. There were 40,430 households in Chelmsford and 29,099 of those were owner occupied. Move to the present, and with all the building in the city, the total number of households has increased by 14.32% to 46,220 and quite surprising (to me at least), the number of owner-occupiers has increased to 32,357 (although as a proportion, it is only 70% compared to 71.9% twenty years ago).

However, it’s rented sector that is truly fascinating … twenty years ago, only 1,823 properties were privately rented in Chelmsford ... and now its 6,095, a rise of 4,272.

The twentysomethings of Chelmsford housing difficulties haven’t been helped by the local authority selling off council housing, with the number of council houses dropping from 6,616 to 1,144 over the same twenty-year period. Demand for decent rented property remains high, as Cameron’s much vaunted house building program is years away and has decades of under investment to catch up on before it starts to affect demand. Even with the Buy to Let tax rule changes over the coming few years (which will see the maximum tax relief available to landlords drop from 45% to 20%), private landlords still have an important role to play in housing the people of Chelmsford and those who educate themselves and treat it as a business will survive and prosper.

The best way Chelmsford landlords can protect their income from property (and mitigate the affects of the tax rises) is to keep the homes they let out in Grade A condition. I have found, especially over the last three or four years, Chelmsford tenants have ever growing demands from their rental property, but many are prepared to pay ‘top dollar‘ for houses and apartments that meet their high expectations. You must not forget, letting property in Chelmsford (in fact anywhere) is a business, so all private landlords should also seek the advice, opinion and commentary of property professionals.

... And just as the other half had sorted the family, he asked ‘What of the news of Stamp Duty changes for Landlords coming in April?’ My thoughts are with such low supply (i.e. numbers of property for sale), and high demand it is hard to imagine Chelmsford property values will see much impact – but I predict, ever so slightly, the proportion of owner occupiers should increase slightly compared to buy to let landlords in the coming decade as the the housing market should return to balance. For more in-depth thoughts on the Chelmsford Property Market, which have a library of similar articles like this, all on the Chelmsford Property Market, please visit my blog –

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