Richard Zammutt - Property Blog

Welcome to my first property blog.

I am pleased to say that Colchester house prices edged up by a further 0.7% in October. As a result, the annual pace of house price growth in Colchester is up at 4.7% from 3.1% in September. We need to go back to 2010 to see such a high growth, as it continues to outpace earnings by a wide margin.  The average wage growth has been running at less than 1% in recent months

I am not an estate agent, but know most of the estate agents in town well and they say new buyer enquiries have moderated somewhat in recent months, and the prospect of interest rate increases together with subdued wage growth may temper demand in the year to come. The demand should be there as the brightening economic outlook and consumer sentiment remains buoyant thanks to declining inflation and sustained decreases in unemployment down in Colchester by 8.2% year on year.

Nevertheless, Colchester housing affordability does not appear stretched by historic standards, in part due to the low level of mortgage rates. The cost of servicing a typical mortgage remains close to the long run average of 30% of take home pay and it has been proved time and time again to be cheaper than renting. A lovely three bed semi can be yours in Colchester in one of the top areas for £185,000, meaning if you could save the deposit, it would be cheaper to rent than buy. So why are first time buyers buying their first house instead of renting? 

It comes down choice and lifestyle of the tenants. In many cases renting provides the flexibility some people, especially young people, want and need. For others home ownership is top priority but when there is no social pressure to buy and you can ring the landlord and sort out any issue , why would someone want to buy. Youngsters find it harder to save for the deposit when Apple launch their latest iPhone each six months or the next 50 inch LCD TV needs buying. Renting is a choice and we are developing a more European mindset it would seem.

Therefore, my message to Colchester landlords is renting is here to stay for the medium to long term, whilst the outlook in the short term for the Colchester and surrounding areas housing market remains uncertain. The number of mortgage approvals fell by almost 20% between January and May, suggesting that activity was cooling. However, there was a modest rebound in June and it is unclear how much of the slowdown was due to the introduction of Mortgage Market Review rather than an underlying loss of momentum. 

It’s all about buying a property that will attract the right sort of tenants, a good balance of yield and capital growth and when you do come to sell it in ten or twenty years, it will sell whatever the market is doing at the time. As I don’t sell property, I can give you my honest opinion on any property. Many landlords send me Rightmove links to property, asking my advice. 

You can too if you want .. its no trouble at all, but I will warn you, I will always tell you what you need to hear, not want you want to hear!!