Lettings demand continues to outstrip supply, with rental prices continuing to rise to help those Landlord’s with rising mortgage costs, although the spiraling rents are seeing a slow-down in turnaround times between tenancies. Our Consumer Price Index rent reviews remain at 4% for another month. As with last month, pricing remains key and I would always recommend prioritizing quality of Tenant over price.
The sales market continues to flatline with the reduction in transactions continuing. Pricing is key, overpricing with the expectation of allowing room for negotiation will more than likely leave a property gathering dust on Rightmove (the largest search engine for property shopping). If you bought a new build property you would usually not expect to recoup your investment within five years and then start to see a profit but in Colchester and the surrounding areas, we are seeing some developments where that investment has still not been recouped in 15 years.
A summary of the information detailed in the report below is available on our website (updated monthly) – see “Local Market Focus”, under the “About Us” tab, or click on the link below:
Colchester Rental Market Overview
Whilst average rents continue to rise and demand still outstrips supply, the slowdown in applications continues as does the turnaround time between tenancies. Average monthly rent is now £1,046 (up from £1,037 in January 2024), which represents an 9% increase over the last 12 months (no change from January 2024).
- 51% of homes let in the past 12 months were flats (same as last month), achieving an average rental value of £889 (up from £882 last month), per calendar month. Houses achieved an average rent of £1,233 per month (up from £1,225 in January 2024).
- Average age of a Tenant is 34 years (no change from the last three months), and 23% of renters are aged between 25 and 29 (same as last month).
Featured rental property of the month – completely biased as we are marketing it but simply stunning.
Three bedroom converted barn with stunning views over the River Colne – £2250 per calendar month
https://www.rightmove.co.uk/properties/144387377#/?channel=RES_LET
DEPOSIT DISPUTES
Did you know : Disputes about tenancy deposits are raised almost equally by both sides: 48% of disputes are raised by landlords or their agents, and 51% by tenants.
With the DPS, 19.1% of disputes are found in favour of the landlord, and 41.5% in favour of the tenant. A total of 39.4% of cases lead to a split award.
In all cases though it is crucial to have a good quality inventory and a check-in report, as well as a check-out report, done by a professional INDEPENDENT inventory clerk, and the agent who is dealing with the deposit to have very good communication skills and to be focused on the details.
Deposit disputes take time to process and the statistics show that the outcome generally favours the Tenant, so we endeavour to negotiate a fair deal for our Landlords, wherever possible, to avoid having to lodge a dispute. There will, however, be cases where Tenants refuse to negotiate and we will absolutely lodge a dispute where necessary.
And here are our deposit success statistics:
% of received amount by Landlords of the claimed amount – 91.29%
% of move outs which didn’t go to dispute (i.e. an agreement was reached between the Landlord and Tenant about any deductions) – 80.95%
% of our success rate in disputed deposit cases – 87.58%
Colchester Sales Market Overview
- Over the last 12 months the average sales price in Colchester was £313,470 (down from £314,029 in January 2024).
- 18% of sales in the past 12 months were flats, achieving an average sales price of £174,722 (down from £175,264 in January 2024). Houses achieved an average price of £356,590 (down from £358,512).
- High Street, CO5 continues to be the location with the most sales transactions over the last 12 months.
- Over the last three months, of the £123 million in property sales (down from £154 million in the last report), 18% (up from 16%), came from flats; 1% (up from 0%), came from new build sales and the balance came from houses.
- The number of sales transactions is 42% lower than this time last year (as opposed to 37% lower in January 2024).
- There were a total of 2,130 sales over the last 12 months (down from 2,275 in January 2024).
- There was a 1% decrease in the annual average sale price.
The market overall trend continues downwards in terms of volume of transactions and prices achieved, as you will see from the two graphs below, the market remains 20% on five years ago, in terms of prices. The East of England, when compared to the rest of the UK, seems to be seeing a greater percentage fall in terms of price, with flats taking the brunt of it, although studio, three- bedroom flats and detached houses in Colchester appear to be bucking the trend.
When you look at how the Colchester area has fared in terms of a percentage decrease in volume of transactions and prices, we sit right in the middle of the pack (see below).
Perhaps unsurprisingly, given that semi-detached houses are the prevalent housing type in the Colchester area, from the map below, you can see that in terms of sales transactions, whilst houses both detached and semi-detached comprise the largest number of transactions at 58.3%, in the small area of central Colchester below, semi-detached transactions far outweigh all others, although in the wider Colchester market, the picture is more evenly spread between detached and semi-detached.
In terms of rental yields, with an average of 6.7%, Colchester still represents good value for investors.
Rightmove Best Buys (as of 21.2.24)
Sioux Close, CO4 – Guide Price of £250,000 for the Freehold interest – a two-bedroom end of terrace, in good decorative order, in the perennially popular Highwoods, with parking, one bathroom, reception and conservatory and a bonus strip of land to the side. 1.5 miles from Colchester North station. Ideal for first-time buyers or investors. Rental value in the region of £1200 per calendar month. On the market with Connells and the price reduced 15.2.24.
https://www.rightmove.co.uk/properties/143180360#/?channel=RES_BUY
Eastwood Drive, CO4 – £250,000 for the Freehold interest – a two-bedroom, semi-detached bungalow, with one bathroom, reception and eat-in kitchen as well as a good size garden, driveway and garage parking. Would benefit from some cosmetic updating but this is a lot of property and potential for your money, as well as being in a sought-after location. Offered chain-free. On the market with William H Brown.
https://www.rightmove.co.uk/properties/86697162#/?channel=RES_BUY
