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Colchester Buy-to-Let Guide

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    Everything You Need to Know About Colchester Buy-to-Let

    Colchester is an Essex city situated 60 miles northeast of London. The area has a large military presence, thanks to the local garrison.

    Zoopla named Colchester as London’s best-value location for commuters. The area appeals to those who need to travel to London regularly but want to avoid paying premium property prices in the capital.

    Today, we’ll cover the local buy-to-let property market and rental yields. Whether you’re investing on your own or buying a property through a limited company, this guide will cover everything from Colchester’s capital growth potential to how the area measures up alongside the rest of the UK.

    Read on for more information.

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      Colchester street view

      Buy-to-Let Property Prices in Colchester

      HM Land Registry’s UK House Price Index puts the average house price in Colchester at £307,706. This resulted in a year-on-year negative price growth of -2.70%.

      If we look at prices by property type, detached houses cost £523,354 on average. Semi-detached homes cost £329,756. Terraced properties cost £266,143. Finally, flats cost an average of £169,882.

      The average property price in the UK is £291,044, making Colchester roughly 5% more expensive than the national average.

      The average property price in Essex is £371,735. As such, Colchester’s property market is good value compared to the rest of the county.

      Meanwhile, according to Savills, the South East has a capital growth prediction of 16.7% by 2028.

      Rightmove shows that Colchester’s most popular property type over the last year was terraced housing.

      Learn More: Discover the latest UK buy-to-let rules with RWinvest’s updated insights! Our beginner guides also provide a full breakdown of how to make money in real estate in 2024.

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      Colchester street view

      Buy-to-Let Rental Market in Colchester

      So, is Colchester one of the best-to-let areas in the UK?

      Currently, Home.co.uk puts the average rent in Colchester at around £1,361 PCM. According to those figures, a room commands an average rental income of £691 PCM – meanwhile, a flat or house costs on average £1,173 PCM and £1,610 PCM, respectively.

      The average rental yield in Colchester is around 5.3%, slightly above the UK’s average of 5.2%.

      Homelet Rental Index states the average UK rental cost in 2023 was £1,276 PCM, making Colchester almost £100 more expensive on average.

      However, the average rental cost for the South East is £1,359 PCM, which has grown 9.86% over the past year.

      As such, Colchester aligns with the regional average despite having better-priced properties.

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      Colchester castle

      Buy-to-Let Investment in Colchester: Area Breakdown

      Note: Property prices are found on Rightmove. Rental yields are calculated with data from housesforsaletorent.co.uk.

      Colchester City Centre

      Colchester City Centre has all the usual amenities – high street shops, commercial areas, apartments, etc. The surrounding streets have terraced housing and traditional properties. They appeal to people who need to go into the city centre but want to avoid the hustle and bustle. The area provides good access to Colchester train station.

      Average Property Price in Colchester City Centre

      The CO1 postcode has an average property price of £264,382.

      Average Rental Yield in Colchester City Centre

      The average rental yield in CO1 is 4.29%.

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        Colchester aerial view

        North and East Colchester

        Areas to the north of Colchester include:

        • Braiswick
        • Mile End
        • Highwoods
        • St. Johns

        These areas have good access to the train station. If you travel by car, you can access the A12 from here. Colchester Hospital and Colchester Business Park provide many jobs in the area, boosting the residential sector in this part of town. Property investors can find apartment blocks and new-build residential properties here.

        East of Colchester includes:

        • Hythe
        • Greenstead
        • St. Anne’s
        • Parsons Heath

        The University of Essex campus sits in this part of the city in Wivenhoe Park. Hythe has its own train station, serving Colchester and areas further afield. Investment property values vary, but you can find good-value homes in these districts.

        Average Property Price in North and East Colchester

        The average property price in the northern and eastern parts of Colchester is £333,748.

        Average Rental Yield in North and East Colchester

        The average rental yield for a rental property in this area is 4.35%.

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        Colchester street view

        South Colchester

        South Colchester includes:

        • Barnhall
        • Blackheath
        • Berechurch
        • Maypole Green
        • Mockwick
        • Shrub End

        These are popular areas with mid-priced properties. Colchester Town train station is in the southern part of the city, serving the local line rather than the mainline to London.

        Average Property Price in South Colchester

        The average property price here is £292,510.

        Average Rental Yield in South Colchester

        The average rental yield is 4.35%.

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          Colchester street view

          West Colchester

          West Colchester includes:

          • Lexden
          • Beacon End
          • Stanway
          • Stanway Green

          The western part of Colchester has access to the A12 and A120, as well as the city centre and train stations with services to London. Some of the most desirable places to live are here, which drives prices higher than other districts in Colchester.

          Average Property Price in West Colchester

          The average property price in this part of town is £384,835.

          Average Rental Yield in West Colchester

          The average yield in this area is 5.17%.

          Question-mark-why-how-what

          Why You Should Consider a Buy-to-Let Investment in Colchester

          Growth and Regeneration

          Colchester is subject to extensive, ongoing transformative efforts.

          A £3bn plan intends to improve the local sports and leisure scene, as well as introduce new homes and improve the city centre.

          The area is expanding quickly. In 2022, Colchester was given city status. Plenty of new build residential developments are underway. This includes the Tendring Colchester Borders Garden Community. This initiative will result in up to 9,000 new properties, plus schools, local amenities and industrial and commercial job opportunities, attracting more people to the area.

          Student Property

          Colchester is the main base for the University of Essex, which has a campus in Wivenhoe Park and hosts around 17,000 students.

          Popular student areas in Colchester include:

          • Hythe
          • Quayside
          • Greenstead

          Transport Links

          As mentioned, Colchester was named London’s best-value commuter town. As such, it offers good access to London via the A12, A120 and Colchester train stations.

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            modern apartment building in city. front exterior of newly built apartment block with balconies. city living in the UK

            Colchester New-Builds

            New builds are growing in popularity as property investments. This is for a number of reasons, including demand from tenants, enhanced energy efficiency, and lower maintenance costs. There’s also an undersupply of available rental properties leading to both local councils and private developers taking on projects to deliver new-build homes in Colchester.

            The council has outlined an extensive plan for new council homes in the area, which could incentivise greater interest from tenants and towards the local rental market in general. However, compared to other cities, the area does not have as many extensive new-build developments in the pipeline.

            There is some new-build interest from private developers, but these can often fetch above-average prices owing to Colchester’s pre-existing reputation as an expensive city for property.

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            Off-Plan Property in Colchester

            Despite property investment trends shifting towards new builds, many investors may find the high price point offputting. Investing off-plan (while the development is in the planning or construction phase) is one way to get a good deal on a new-build property. Investors can usually see below-market prices as the property is still being worked on. With flexible payment plans, investors can also spread the cost, allowing for more affordability.

            However, as previously mentioned, opportunities to invest in new builds are quite limited in Colchester, and therefore, off-plan options are also uncommon. When looking nearby, there may be more chances for off-plan property in Chelmsford as it is closer to London, but generally, investors will want to look at major cities like London and Manchester to have the most diverse investment opportunities.

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              The historic Hollytrees Museum in the market town of Colchester in Essex, UK.

              How Does Colchester Compare to Other UK Regions When It Comes to Buy-to-Let?

              While Colchester’s current trends make it a good alternative to London rental yields and prices, buy-to-let investors may want to look elsewhere to maximise potential profits and get the most out of their property investment.

              For instance, Colchester’s prices are still above the national average. The North of England offers cheaper properties with better yields, giving a more substantial ROI.

              For example, property investments for sale in Liverpool usually have an average price of £180,268 and rental yields around 7% depending on the postcode. Property investors could purchase two city centre apartments in Liverpool for the same price as a house in Colchester, potentially reaping a much better yield in the process.

              Further Reading: Delve deeper into North West investment with our free Warrington Investment Property guide.

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                Want to Invest in Colchester in 2024?

                Colchester could potentially offer lucrative rewards, but investors may find stronger opportunities elsewhere in the UK.

                Want to stay up to date with the rest of the UK market? Take a look at some of our recent buy-to-let guides below:

                Map of Colchester

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                Author

                Dale Barham

                Dale is a property content writer at RWinvest. Keeping a close eye on the UK property market, Dale helps our readers stay informed and up to date on the latest market news and statistics.

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