The market towns of Hertfordshire are well connected and values are lower than in suburbs nearer the capital. Bishop’s Stortford is a 40 minute train journey away from either London to the south or Cambridge to the north, as well as being just five miles away from Stansted Airport. It has a town centre regeneration programme and a number of large urban extension developments in the pipeline. However, most new homes are being built in small developments in villages such as Much Hadham and Clavering.

Apartments have been the dominant new build type in Bishop’s Stortford, making up 85% of new build sales there since the beginning of 2012. New apartments are also affordable relative to the rest of the county, with an average price of £227,000 in 2014, according to Land Registry data. This compares to an average value of £259,000 across East Hertfordshire over the same period. Schemes in Bishop’s Stortford are achieving around £375 per sq ft, although prices can be somewhat higher in the surrounding villages.

^{Source: HM Land Registry}

Closer to London, Buckhurst Hill and Epping offer greater flexibility with a link to central London via the Central line and access to green space: Epping Forest is right on the doorstep. Buyers are willing to pay a premium here, with an average new build property in Epping selling for £467,000 in the 12 months to February 2015, according to Land Registry data.

^{Source: HM Land Registry}

Buy-to-let investors make up a higher proportion of the market here relative to further away from London, looking to take advantage of robust rental growth and strong forecast capital value growth in areas around the capital. Schemes around Buckhurst Hill currently command prices of around £550 per sq ft.

Urban and country life

New homes demand comes from a variety of sources. Young professionals moving out of London and downsizers make up a large share of demand, typically looking for apartments in town centre locations.

This is driven by buyers looking to get more value for their money, with house prices in London at record highs, and the higher quality of life often associated with living out in the country. Seeking a better quality of life was given as the number one reason for moving out of the capital in Savills Spring 2014 Prime Regional Survey.

Demand for houses tends to come from young families trying to relocate closer to the well-reputed schools within Bishop’s Stortford, or “empty nesters” looking to downsize.

According to our 2014 Prime Regional Survey, over a third of families looking for a new prime property listed proximity to good schools as being a key factor, but this comes at a cost: our analysis in partnership with The Good Schools Guide shows that the average house price premium for living near a good school is 24%.

Sources of money

Young professionals and couples looking to start a family typically have little in the way of equity, and are therefore reliant on mortgage finance to buy their home. However, the Help to Buy Equity Loan supports only a small proportion of these purchases: HTB:EL accounted for just 2% of housing transactions in East Hertfordshire and less than 1% in Epping Forest since the scheme began in April 2013.

On the other hand, downsizing “empty nesters” and affluent workers from Stansted Airport tend to be more equity rich, and require less mortgage finance if not buying their property outright. They are generally drawn to the smaller, more bespoke developments in the villages around Hertfordshire.

Development and investment

The development market in the vicinity of Bishop’s Stortford is strong: Savills has identified 70 emerging developments in the surrounding area. Of these, 14 schemes are currently under construction, representing a total of over 4,900 residential units. However, the supply of land for housing looks likely to tighten in future, with 1.95 housing starts for every consent in Epping Forest and 1.29 starts per consent in East Hertfordshire averaged over the last three years.

^{Source: HM Land Registry, Savills Development Database, Glenigan Planning Database}

New developments in Hertfordshire and the east of Essex tend to be small, with most consisting of no more than 30 units. These tend to be for small groups of detached houses, built to a high specification, and with features such as off-road parking and a large garden.

However, there are also some considerably larger schemes in the development pipeline: Solum is preparing to submit plans for a redevelopment of several hundred units in the centre of Bishop’s Stortford, and Crest has recently been granted outline permission for a 370 unit scheme near Great Dunmow.