Many people in our part of Essex, over the last few years, have seen the buy to let market become all about nest egg investment. It has been fuelled by pitiful interest rates on building society savings and reflects the fact that building society savings accounts are paying half a per cent interest and pension returns are struggling to match expectations, turning more and more people into landlords to secure their future.
So what can you expect from your rental property investment? In the short term, rental yields are important, and in Chelmsford, the average annual yield is in the order of 4.5% per year. However, that is based on averages, and as most landlords in Chelmsford tend to buy starter home homes, apartments and terraced houses, the majority of which are achieving 5% to 6.4% per year depending on location and price in the City.
Roll the clock back 10 years to 2004/2005 when the average value of a property in Chelmsford was £177,700. 15 years back to 1999 makes really interesting reading, as the average Chelmsford property value was only £107,800. 30 years ago was around £50,000 and just for a bit of fun, we looked at 1974 at it was around £14,800!
So, not only can you get a better return on your investment with regards to the annual yield, compared to savings accounts at the moment, you also have got the additional capital growth with a property. Chelmsford is also still developing, with more properties and industry being built, this should make for a stable market, bringing new people to the area. This will also keep the demand for property high, which will maintain and grow the property prices further.