Moving to a bigger home is something Chelmsford people with growing young families aspire to. Many people in two bedroom homes move to a three-bedroom home and some even make the jump to a four-bed home. Bigger homes, especially three bed Chelmsford homes are much in demand and it can be a costly move.
If you live in Chelmsford in a two-bedroom property and wish to move to a four-bedroom house in Chelmsford, you would need to spend an additional £359,045 (or £1,418.23 pm in mortgage payments (based on the UK Bank average standard variable rate)). However, going straight to a four bed from a two-bed home is quite rare as most people jump from a two to three-bedroom home, then later in life, from a three to four-bedroom home.
So, after being asked my thoughts on moving home in Chelmsford by a friend recently, please find my analysis of the local property market and then some thoughts. To start with, let us see what the average property price is for a Chelmsford property by the number of bedrooms it has.
|Average Property Price in Chelmsford by Bedroom|
|1 bed||2 bed||3 bed||4 bed||5 bed|
I then decided to calculate what it would cost to make the jump upmarket from one bedroom to two bedrooms, two to three bedrooms etc, etc, both in actual money and in mortgage payments (using the current standard variable rate of UK Banks of 4.74% – so the mortgage cost could be higher or lower depending on the mortgage taken).
|Price Difference to make the move||Cost per month to move up market (Mortgage)|
|1 bed to 2 bed||£79,370||£313.51|
|2 bed to 3 bed||£82,451||£325.68|
|2 bed to 4 bed||£359,045||£1,418.23|
|3 bed to 4 bed||£276,595||£1,092.55|
|4 bed to 5 bed||£88,750||£350.56|
There are some interesting jumps in costs when moving upmarket as a Chelmsford buyer. The cost of moving from one to two beds, and two to three beds is relatively reasonable, whilst the jump from three to four beds in Chelmsford is quite high (and hence why some four bed properties are taking slightly longer to sell nowadays). On an aside, a lesson here for all my landlord property blog readers, you can quite clearly see why the larger 4 and 5 bed properties don’t offer the best returns for buy to let because the monthly finance costs and rents achieved don’t match up so well (i.e. A mortgage for a 4 bed home in Chelmsford would cost you 76.00% compared to a 3 bed mortgage, but the jump in rent would be a lot less than that – although depending on your circumstances, 4 bed homes can offer other advantages to buy to let – pick up the phone if you want to know what they are in more detail).
So, coming back and looking at the stock of properties in Chelmsford, this also makes interesting reading …
|Housing Stock in Chelmsford by Bedrooms|
|1 bed||2 bed||3 bed||4 bed||5 bed|
The most active purchasers are 20 something and 30 something home-owning parents with growing families. Many look to more modern developments for the perfect balance of access to decent primary schools, commutability and lifestyle. For landlords looking to buy within Chelmsford, they face stiff competition from these 20/30 something families, making the three bedroom Chelmsford home massively in demand, often attracting spirited offers and selling within weeks of listing. This mix of homebuyers and landlords is a pressure point in the Chelmsford property market. Again, if you are a landlord, call me and I will show you areas with decent returns where you aren’t in so much competition with young Chelmsford family homebuyers.
Yet, the cost of an additional bedroom can be too much for some Chelmsford buyers. It is quite challenging moving home the first time, but to then find you are priced out on the next move up the ladder can be quite disconcerting, with families often having to move to a different part of town to get the bigger home they need.
Nevertheless, that’s the place many homeowners find themselves in with the cost of the additional bedroom being too much to bear. To those buying their home for the first time, all I suggest is they not only consider the mortgage payments and other costs of their first home, but also do their homework into their next rung up the Chelmsford property ladder. Thinking about it now will keep you ahead of the game in the future; as your number of bedrooms, family property needs and lifestyle wants change.
..and Chelmsford landlords – well these changes in the way people live also mean there are opportunities to be had in the Chelmsford rental market. Many Chelmsford landlords are starting to pick my brain on this, so if you don’t want to miss out – drop me a line.