Kings Road outperforms Lady Lane by 10%!

Lady Lane is one of the sought after places to live in Chelmsford as it is in the popular ‘Old Moulsham’ area, which has fantastic schooling facilities nearby and is also convenient for the station, for those of us who need to commute. Properties in this area are predominantly 3 bed semis, with a few 2 bed terraces and 4 bed detached thrown into the mix. The average selling price of a property here is around £259,000 and rents are on average around £1180 per month.

One of our landlords had also been looking at this area and wanted to find out if Lady Lane would be a better rental investment than Kings Road, where she has another property at the moment. When we compared the two, we found Kings Road is made up of two & three bedroom houses which are ex-local authority. On average they sell at around £201,000 and can rent at around £1010 per month.

It became interesting when we compared the possible annual yields, as Lady Lane could achieve 5.4%, which is by no means a poor return, but yields can be as much as 10% more on Kings Road at around 6% on average. 

However, we must remember that yield is not the sole consideration when investing in buy to let. The average value of property on Kings Road has risen by 1.6% since 2011, but Lady Lane, in the same time frame has risen by 17%.

If you would like to come and discuss property in the area, you are welcome to visit our office on Duke Street.

Good buy to Let option in Chelmsford...

Having a little nose on Rightmove this morning and this property caught my eye. It looks to be in lovely condition and they are great apartments for buy to let. They are modern, close enough to the centre for professionals and usually a very good size. 
http://www.rightmove.co.uk/property-for-sale/property-34771254.html

With the event of a lot of new build apartments coming to the market at the moment circa £1100 / £1200, you would think that the market is becoming flooded with property. Within this particular price bracket, you wouldn't be too far from the truth, however 2 bed apartment sub £1000 are extremely lacking, and not everyone is earning mega bucks!

Apartments of this type are currently letting for around the £875 pcm mark (and flying out the door), which if you compare against the asking price of £205,000, could produce you an annual return of 5.1% 

If this particular property isn't floating your boat, but have seen something else that you would like an honest opinion on, e-mail me the link over to stephen.frost@martinco.com and I'll be happy to give you a rental guide and opinion on lettability.

Chelmsford Apartments - 1 bedroom or 2 bedrooms?

Last week, I spoke to one of my landlords and she asked me if the number of bedrooms in a property had any influence on the return she could get. I did some research and followed up her query – I was actually quite surprised with the results...

Currently in Chelmsford, the average rent for a one bed property is around £749per month with an average value of £184,683. This means an approximate return/yield of 4.8% per year. This is of course, the average.

There are one bed apartments on the market for rent at a higher price than some two bed apartments. In fact, some one bed apartments in Chemsford can attract rents in the mid £800's whilst some converted terraced houses with flats in them can be rented for as little as £550 per month. This means yields on one beds can range between 3.5% and 5.5% (approximately).

Two bed apartments in Chelmsford can be priced anywhere between £350,000 in one of those modern City Centre developments and as low as £150,000 in the Springfield area. Again, rents can be quite varied, ranging from over £1300 per month for some luxury City centre apartments in Chelmsford to £700 per month in Broomfield or around Springfield. However, looking at the average rent for a two bed apartment in Chelmsford, I calculate it to be £959 per month with the average value being £252,171 which gives a return/yield of 4.5% per year.

Whilst the difference in the yields should be taken into account, it is only one of many factors you should consider before buying a property. Whilst two bedrooms are more expensive to buy, they will always let better. Do they sell better? Well, 50% of the two bed apartments on the market in Chelmsford at this moment in time are sold subject to contract compared to 52% of 1 bed apartments – so not much difference there.
It really comes down to the property and type of tenant. Two beds attract small families and professional sharers, which bring both advantages and disadvantages to the landlord, but one beds have better yields, although with a one bed you tend to get a higher turnover of tenant.

It depends what you want from your investment. I know the lettings market in Chelmsford so I can advise you what you can expect to achieve in rent and how it go up in value together. If you would like any advice on choosing properties, come and see us at our office on Duke Street.

2 Bed apartment in Chelmsford with a 5.1% return...

Halfway through another week and, here's another hot property coming your way. This is a really nice example of a 2 bed apartment in Chelmer Village. It's in really lovely condition by the looks of things, having had an updated kitchen and bathroom fitted.
http://www.rightmove.co.uk/property-for-sale/property-54616046.html?premiumA=true 

Similar properties in the area are renting for around £750 pcm  - £775 pcm, for the nice ones, which means, when you compare it against the current asking price of £180,000, that you could potentially receive an annual gross return of 5.1%. 

You will need to bear in mind though, that this will probably be a leasehold property, so there may be an element of service charges / ground rent.

My door is always open if you want to pop in for a chat about investing in Chelmsford, my office is on Duke Street

Cracking little house in Chelmer Village, Chelmsford

Good morning everyone, I hope you all had a good weekend. 

Now, I saw this property come to market recently and thought it was worth putting it out there for all you potential landlords. 

Please excuse the outside image, it doesn't make it look very appealing, I know, but inside it does look quite nice and would appeal to potential tenants. Tenants would pay around £725 pcm for this type of property, as this is what similar properties are going for in the area. 

This Chelmer Village House has come to the market with Jordans Property Matters for a price of £169,995, which doesn't seem too unreasonable in the current market. It is also freehold, which is a bonus. 

So, if we do our yield calculations, based on these figures, you could be looking at a a gross annual return of 5.1%. Not bad for a little 1 bed house!

If you would like any more information about buying to let, feel free to give me a call 01245 330500

Chelmsford or Witham for a buy to let investment, which is the best?

Should you be investing in Chelmsford or Witham when it comes to property? Both areas have a mainline train station; therefore have an attraction from the professional commuter market.

The average property value in Chelmsford is £327,801 and in Witham is £255,108, (Chelmsford’s values are 28% higher than Witham). The average rents, goes the other way though, with Chelmsford having an average rent of £1105per month and Witham at £1250 per month. Witham is therefore 11% higher than Chelmsford, with their average rents. This means that Witham has the potential to give investors higher returns on their Investments with an average yield of 5.8%, compared to Chelmsford’s at 4%. This must mean that Witham is the place to buy, right? Well, before you go jumping in, I have done a little research to compare the two areas in more depth.

Investing in property is all about what you buy the property for. You make your money with your buying value, rather than your eventual sale value. Over the last five years, property values in Witham have increased by 18%. This is great for those that have already bought a property in the town. When I looked at property values in Chelmsford over this time, I found that they have increased by a similar amount of properties that have actually sold in each area at the same time, Chelmsford has had 12,532 house sales compared to Witham with 2,274. Chelmsford is a slightly bigger area than Witham, but even still, that is a huge difference.

If you are considering buying now, whilst the yields in Witham are potentially greater than Chelmsford, Chelmsford seems to have more stability in its re-sale market.

Good Returns on The Village, in Chelmsford...

This modern 2 bedroom apartment is in prime rental territory, being on The Village, just off Writtle Road and looks to be a good example of an apartment within this area. They rent really easily in this location and get snapped up as soon as they come to market. 
http://www.rightmove.co.uk/property-for-sale/property-54355286.html

Similar properties to this, rent in the region of £775 pcm. The asking price of this apartment is £175,000, therefore you could be looking at a potential annual return of 5.3% (before any service charges/ground rents)

If you would like to pick my brain about where the good areas are for buying to let, feel free to pop in for a chat.

Why are less and less people moving house in Chelmsford?

Years ago, it seemed that people moved all the time, friends of mine always seemed to be packing up and moving on to their next home. I actually read on the internet that the average UK person moves 8 times in their life - or every 9 to 10 years, however,  from research I have carried out it shows things have changed considerably in Chelmsford in recent years, and interestingly, the trend is getting worse!

In Chelmsford, there are 69,667 properties. However, after we remove the 9,120 council houses, 8349 privately rented houses and 770 houses where the occupants live rent free, that leaves us with 51,428 owned properties, be that 100% outright, with a mortgage or shared ownership. This means 73% of the properties in Chelmsford are occupied by the owner (the national average is interestingly 64.2%) but the number of people who have sold and moved house in Chelmsford, over the last 12 months, has only been 2588. This means on these figures, the homeowners of Chelmsford are only moving on average every 19.8 years.

There are a couple of reasons for this. Firstly, the cost of moving house has risen dramatically over the last twenty years and, secondly, with many remortgaging their properties in the mid 2000’s before the price crash of 2008, there is a reluctance or inability in a small minority of homeowners to finance a home sale/purchase, due to lack of equity. These are both factors leading to driving fewer moves by existing homeowners.

However, the big effect has been the change in house price inflation. Back in the 1970’s and 1980’s, house prices were doubling every 5 to 7 years. Even in Greater London, with its stratospheric property price increases over the last few years, it has taken 13 years (August 2012 to be exact) for property values to double to today’s levels.

So what does this all mean for Chelmsford buy to let landlords? Well, for the same reasons existing Chelmsford homeowners aren’t moving, less ‘twenty something’s’ are buying their first home as well. Chelmsford youngsters may aspire to own their own home, but without the social pressure from their peers and parents to buy their first property as soon people reach their early 20’s, the memory of the 2008 housing crisis and the belief the hard times either aren't over or the worst is yet to come, current and would-be homeowners are warming to the idea of renting. I also believe UK society has changed, with the youngster’s wanting prosperity and happiness; but wanting it all now... instantly... today... without the sacrifice, work and patience that these things take. 

As a society, we now expect things instantly, and if it doesn’t come easy, doesn’t come quick, some youngsters ask if it is really worth the effort to save for the deposit?  Why go without holidays, the newest iPhone, socialising four times a week and the fancy satellite package for a couple of years, to save for that 5% deposit. Why should they if there is no longer a social stigma in renting or pressure to buy as there was say a generation ago?

Interestingly, 11.9% of Chelmsford properties are privately rented, double it was ten years ago. As a result, the demand for rental properties continues to grow from tenants, meaning those wishing to invest in the buy to let market, over the long term, might be on to a good thing?