Is North Springfield, one of Chelmsford’s Hot Spot’s?

I was talking to a homeowner, who had a three bed terraced house on Petunia Crescent, in North Springfeld, which had sold in a matter of days. He asked me if there something special about the area, so I did a little research...

...I have included the surrounding road such as Lupin Drive, Cornflower Drive and the off-shoot road in my findings to give more of an idea about this particular area as they are similar styles of property, being a mix of 1, 2, 3 & 4 bedroom flats & houses.

The properties that seem to have turned over the most sales in the last year are three bed houses, which average at a selling price of £242,888, two bed apartments, averaging with a selling price of £136,785 and one bedroom apartments have an average selling price of £107,000.

Comparing the rental prices for these properties in the last year for the same types of property, have been as follows. Three beds have rented for an average rent of £1024, which would give you a fairly decent 5% yield against the average selling price of £242,888. Two bedroom apartments rent with an average rent of £718, which gives us an amazing yield of 6.2% against the average selling price of £136,785. But the one bedroom apartments have completely outperformed the rest, potentially generating yields of 6.9%! (Average rent of £623 against selling price of £107,000).

It appears on these figures that there are no bad investments within this area, even the lower performing 3 bed houses are still able to potentially generate you a 5% return. One thing to bear in mind with the flats in this area however is that there are a lot that are being sold with short leases, this means that the purchase price appears to be very attractive, however it may make getting a mortgage a bit trickier as you won’t be able to choose from as many lenders. We have been advised that extending a lease would cost approximately £12,000 - £15,000 for these properties, so this is something that you could factor in to your investment. If you plan on keeping the property rented out for a few years, when you eventually come to sell the property, look at extending the lease at this point. This means that you will benefit from not only natural capital growth, but also a higher price, because it will then have a long lease.

In the last 3 – 4 years, the property values on the three bedroom houses has risen by 21%, on the one bed flats by 17%, but on 2 bedroom apartments, the rise in value has been 23%, the best of the bunch.

This research highlights to me that 2 bedroom apartments are the better bet for this area, whilst they don’t give you the highest yield, (6.2% is still pretty darn good!) the capital growth is the better out of the types of property.

If you would like to talk to me about property, feel free to pop into our office on Duke Street.