Property in Hertfordshire and Essex: an excellent investment

On behalf of Attwaters Jameson Hill posted in Private Wealth on Wednesday, December 8th, 2021

Despite all the odds, our Private Wealth Guide for 2021/22 painted an extremely positive picture of Hertfordshire and Essex’s booming property markets. In Essex, searches for properties in popular hotspots such as Saffron Walden and Walton-on-the-Naze nearly doubled in 2020, while seaside destination Southend-on-Sea saw one of the highest numbers of homes changing hands as people flocked to smaller towns and coastal areas. Meanwhile, the search term ‘houses for sale in Hertfordshire’ soared by 61% in 2020 compared with the year before, with locations such as Harpenden, Welwyn Garden City and Rickmansworth seeing the highest house price growth.

With their mixture of bustling urban towns, picturesque countryside villages and seaside destinations, it’s little wonder that Hertfordshire and Essex have enjoyed such excellent property prospects over the past couple of years.

A historically good investment

But in fact, the past couple of years are only the tip of the iceberg – properties in Hertfordshire and Essex have also proved to be excellent long-term investments for homeowners across the two counties. Hertfordshire buyers who purchased an average property in 1995 will have seen a staggering 437% return on investment in 2021, with their home initially costing an average of £90,665 and selling for £486,451 in August of this year. Meanwhile, an Essex homeowner who purchased their property in 1995 would have seen a slightly lower, but still impressive, 406% return on their investment. They would have spent an average of £69,818 on their property in 1995 and netted £353,499 if they’d sold it in August 2021.

The London connection

With Hertfordshire and Essex just a stone’s throw from London, it’s little wonder that properties here have historically been at the very top of the growth curve. Behind the capital itself, the East of England region (containing the counties of Bedfordshire, Cambridgeshire, Essex, Hertfordshire, Norfolk and Suffolk) has seen the highest average annual rate of growth over the past decade at 5.1% per year – way above the UK’s 4.3% average. In exchange for a short commute, London workers have been able to purchase cheaper properties on the capital’s outskirts that nonetheless have significant investment potential. Even with hybrid working becoming the norm, Hertfordshire and Essex remain popular with buyers looking to remain within commutable distance of London whilst enjoying more space and a more affordable lifestyle.

A good choice for buy-to-let investors

For those looking to expand their property portfolios and generate income from the booming private rented sector, Hertfordshire and Essex are again good choices, with solid rental yields to be had in both counties. Compared with the UK’s average rental yield of 3.63%, yields in Hertfordshire can reach up to 5%, with Hatfield offering a 4.9% return. Meanwhile Essex properties have the potential to generate an average yield of 4.1% across the county – and potentially higher in areas particularly near London such as Brentwood, Basildon, Harlow and Thurrock.

Looking to the future

Following this year’s bumper house price growth of 9% across the UK, it is unsurprising that estate agents Savills expects this to drop back to a steadier 3.5% in 2022. Even so, it still expects a healthy five-year compound growth of 21.5% UK-wide. Positively, Savills says, this means that we can expect a “soft landing, rather than a dramatic correction in values in the short term.” The property expert has also upgraded its prime property forecast, with homes within the prime inner commute (i.e., 30 minutes from London) and outer commute (i.e., a 30-60 minute commute) expected to grow by 22.1% and 22.7%, respectively. And, with increasing numbers of people working from home and able to live further outside the commuter belt, prime properties in the wider southern region are predicted to grow by a huge 25.7%. All in all, the future looks bright for the Herts and Essex property markets.

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