The fresh data is suggesting that buy-to-let investors are cashing in on the lower property prices of flats, which bring healthy rental yields. The volume of flats sold by Balgores across its offices is up 29% year on year, with Basildon showing the biggest increase (50%), followed by Hornchurch (41%), Romford (32%), Chelmsford (11%) and Brentwood (10%).
BTL investors have snapped-up almost a third of flats marketed by Balgores in the last 12 months. This healthy demand has pushed up prices, with Romford recording the largest year-on-year increase of 22%. Brentwood has gained 17%, Basildon 10% and Chelmsford and Hornchurch have each recorded rises of 6%.
The average price for a flat in Brentwood is now standing at £228,994, Romford at £179,952, Chelmsford at £178,000, Hornchurch at £171,892 and Basildon at £121,978.
Martin Gibbon, Group Director of Balgores Property Group explains: “Buy-to-let is booming in Essex and across the UK as a whole. It is estimated that private landlords in Britain are set to own £1tn worth of homes by late spring 2015, as rising house prices and growing appetite from investors drives up the value of the booming buy-to-let sector.
The private rented sector has expanded rapidly in recent years, as would-be first-time buyers have struggled to get a toehold in the housing ladder. Buy-to-let landlords now own properties worth a total of £930.7bn, three-and-a-half times the £262.1bn the sector was worth in 2001, according to figures from the Office for National Statistics and Land Registry.
Basildon, traditionally one of the cheapest areas in Essex to live, has seen big increases in prices. However, it still possible to achieve gross rental yields of between 8% - 9% in Basildon. It is also possible to achieve 7% gross yield in Hornchurch, where you can pick up flats for under £170,000.
Romford's price increase is probably due to its convenient commute to London's Liverpool Street (approximately 25 minutes) and the impending Crossrail. This, combined with a huge demand from both landlords and first time buyers, appears to be driving up the prices.”
