Essexs Commuter Towns are Buy-to-Let Hotspots

By the Beresfords Marketing Team - 1st August 2013

Nearly three-quarters (70%) of the county’s buy-to-let properties are bought in commuter towns according to new research conducted by Beresfords.

Using our own bespoke data, we have mapped out where buy-to-let landlords are investing.  The information includes particular hotspots, the average property prices paid for buy-to-let properties and the anticipated gross yields.

Over a quarter (26%) of landlords chose to invest in Colchester, where the average buy-to-let property costs £124,878. Not only are property prices cheaper than other peripheral areas, anticipated gross yields are also between 5.5% and 8%. With excellent transport links and demand created around the large military barracks and long established Essex University, Colchester is an attractive option for investors.

Chelmsford and Brentwood are tied in second place both with 22% of landlords purchasing here. The average buy-to-let property price in Chelmsford is £185,880 and yields can reach 6% gross. The city centre is a great draw for young professional tenants, as well as the train links to London.

Brentwood is more expensive; with the average buy-to-let property priced at £206,146, and anticipated yields between 4.5% and 6% gross. This is due mainly to the higher price paid at the outset for a property. The tenant profile here is slightly older, with more longer term contracts due to the excellent state and private schools in the area.

The established, leafy areas, such as Billericay, Upminster and Shenfield have offered investors considerable capital growth over the medium to long term. Although gross yields can be slightly lower in these areas, they attract interest from long term investors who are not so dependent on immediate income but instead are more interested in the long term asset growth over 10 or 20 years.

Investors looking for immediate income from their buy-to-let properties will be drawn to areas such as Chelmsford, Braintree and Colchester where higher gross yields are found.

Across the UK, the buy-to-let market has seen strong growth over the last few years. Low interest rates have not proved practical for savers, and many people are questioning the long-term performance of their pensions. For others who have not yet made any financial retirement plans, buy-to-let is seen to offer the benefit of a regular income as well as potential capital growth in the value of their assets.

Steven Bond, Managing Director of Residential Lettings at Beresfords comments: “We are now dealing with many ‘virgin’ landlords.  Some have sufficient savings for a deposit and raise a buy-to-let mortgage to fund the difference on a purchase. Others have substantial cash funds which are languishing in savings accounts and feel that owning a buy-to-let portfolio not only provides a regular source of income, but it is a flexible asset which they can retain, enjoy the regular income and see longer term asset growth.

“We conduct private consultations with every new investor because their requirements and long-term objectives vary. Many lead busy lives and do not have too much time to devote to such a venture which is where we step in and assist. Others just need their ‘hand held’ and they are fully supported through the entire process.”