Chelmsford and Braintree have experienced high levels of development, with housing completions rising 52% year on year over the past three years in Chelmsford and 20% in Braintree. Elsewhere, most housebuilding is on small developments in villages and smaller towns such as Sible Hedingham and East Hanningfield, where asking prices are in the region of £250 per square foot. Values are higher in towns with transport links, with some developments reaching as much as £500 per square foot in places such as Ingatestone.
Chelmsford and Braintree have experienced high levels of development recently.
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FIGURE 3New homes development pipeline
Source: Savills Development Database, HM Land Registry
Buy-to-let activity in Essex is likely to accelerate as higher capital values and low yields force investors to look outside of London for more attractive prospects – gross rental yields in the East and South East were 5.9% in 2014, compared to 2.8% in Inner London according to the IPD Rental Index.
Rental demand has grown in town centres across Essex: the percentage of privately rented households increased by 15.9% in central Chelmsford and by 11.4% in central Brentwood between the 2001 and 2011 Censuses.
Investors can also expect to benefit from higher house price growth across the East of England, where we have forecast higher house price growth than in London. This is because low income growth in the capital and new mortgage lending regulations are limiting the affordability of London property, and so demand for accommodation in its cheaper hinterland is growing.
House price growth in commuter locations such as Ingatestone and Chelmsford is likely to remain high as the demand from London workers increases.
Price growth in Shenfield and around other Crossrail stations should be particularly high, as the additional infrastructure eases access to central London employment and leisure locations.
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FIGURE 4Savills prime five-year house price forecasts
Source: Savills Research
NB: These forecasts apply to average values in the second hand market. New build values may not move at the same rate
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FIGURE 5Savills mainstream five-year house price forecasts
Source: Savills Research
NB: These forecasts apply to average values in the second hand market. New build values may not move at the same rate
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