Savills World Research UK Development

Spotlight Residential Development Sales 2015

SUMMARY Rail links make Essex attractive to commuters, driving up values

■ Beating the region: house prices ■ Local premiums: there are in have grown by 21.5% large house price premiums for “House prices in Chelmsford over the last three years – faster than homes near rail links, with new both the East of and South build prices in villages with stations have grown by 21.5% over the East averages. Price growth in Essex such as Ingatestone nearly double last three years – faster than over the last few months is catching prices in more rural villages such up with the regional average. as Sible on a per square both the and foot basis. ■ On track for value growth: South East averages” is not expected to reduce ■ Stock levels rising: Chelmsford travel times from Shenfield and and Braintree have experienced high Brentwood, however the new levels of development recently, with infrastructure should still help drive housing completions rising 52% year price growth because of increased on year over the past three years in capacity and more frequent services Chelmsford and 20% in Braintree. to .

savills.co.uk/research 01 Spotlight | Essex Residential Development Sales

Chelmsford since 2012, faster than in Essex city for the relatively affordable prices (6.1%) and the wider East of and more pastoral surroundings: beats the England region (6.2%). This growth average new build prices in region has been helped by demand from Chelmsford are 42% lower than in London professionals: commuters London according to Land Registry into London made up a quarter of data. Towns and cities in Essex Price growth in Chelmsford Chelmsford residents at the time of such as Brentwood, Chelmsford and has been higher than in the the 2011 Census. are also well connected, surrounding regions with the rail journey from Chelmsford Transport links and Brentwood to London Liverpool House prices in Chelmsford have These London commuters cast their Street taking 40 minutes and from grown 6.7% annually on average searches for new homes outside the Shenfield and Ingatestone taking less than half an hour. Basildon offers a FIGURE 1 more convenient solution for financial House prices relative to peak for Chelmsford, Essex, and sector workers, with trains running into Canary Wharf via West Ham in regions Mar-15 around 45 minutes. ■ Chelmsford ■ Essex ■ South East ■ East of England ■ England & Wales

15% Shenfield, Brentwood, and Harold Wood have the additional benefit 10% of Crossrail stations in the pipeline. Although this new route to London is Values in Chelmsford 5% fell less than the region not expected to reduce travel times, during the recession Crossrail will bring benefits in the

0% form of increased capacity and lower ticket prices. -5% Away from the city In addition to city and town centre -10% developments, Essex offers a The city has experienced stronger huge variety of small, bespoke -15% growth than the county developments in villages and small and East of England towns such as and Hatfield -20% Peverel. These offer larger houses with additional features such as Jul 2014 Jul 2009 extensive gardens and off-road Apr 2013 Apr 2008 Oct 2010 Jan 2012 Jan 2007 Jun 2012 Jun 2007 Feb 2014 Feb 2009 Mar 2011 Mar 2006 Aug 2011 Sep 2013 Dec 2014 Aug 2006 Sep 2008 Dec 2009 Nov 2012 Nov 2007 May 2010 parking. According to Savills Spring Source: HM Land Registry 2014 Prime Regional Survey, 34% of people moving to the South East of England are motivated by wanting FIGURE 2 a larger property: often in order to Average new build prices, year to Mar-15 have access to more bedrooms or additional outside space. ■ Chelmsford ■ Brentwood/ Shenfield ■ Basildon ■ Essex ■ South East ■ England & Wales

There is also a range of developments £500,000 in towns across the east Essex coast,

£450,000 where sea views have a significant impact on values. Research from £400,000 Savills earlier this year showed there is a price premium of 14.3% for £350,000 Southend properties up to 100 metres

£300,000 from the sea front, relative to houses up to a kilometre away. £250,000

£200,000

£150,000

£100,000

£50,000 Average price of a new £0 Detached Semi-Detached Terraced Flat All build in Essex is 48% cheaper than in London Source: HM Land Registry

02 2015

FIGURE 3 New homes development pipeline

KEY

Sites by planning status: n Application n Permission n Pre-planning n Under construction

Sites by number of units: Over 1,000 500 to 1,000 250 to 500 100 to 250 50 to 100

Average transaction value 12 months to Feb-15: n Over £700,000 n £600,000 to £700,000 n £500,000 to £600,000 n £400,000 to £500,000 n £300,000 to £400,000 n £200,000 to £300,000 n Under £200,000

Source: HM Land Registry, Savills Development Database

Development and Buy-to-let activity in Essex is investment likely to accelerate as higher capital “There is a 14.3% price Chelmsford and Braintree have values and low yields force investors experienced high levels of development, to look outside of London for more premium for seafront with housing completions rising 52% attractive prospects – gross rental properties in Southend” year on year over the past three years yields in the East and South East in Chelmsford and 20% in Braintree. were 5.9% in 2014, compared to Elsewhere, most housebuilding is 2.8% in Inner London according to on small developments in villages the IPD Rental Index. and smaller towns such as Sible Hedingham and East Hanningfield, Rental demand has grown in town where asking prices are in the region centres across Essex: the percentage of £250 per square foot. Values are of privately rented households Commuters into London higher in towns with transport links, increased by 15.9% in central with some developments reaching as Chelmsford and by 11.4% in central account for a quarter of much as £500 per square foot in places Brentwood between the 2001 and Chelmsford residents such as Ingatestone. 2011 Censuses.

savills.co.uk/research 03 Spotlight | Essex Residential Development Sales 2015

Investors can also expect to FIGURE 4 benefit from higher house price Savills prime five-year house price forecasts growth across the East of England, where we have forecast higher house price growth than in London. WIDER OUTER This is because low income growth SOUTH OF COMMUTE in the capital and new mortgage ENGLAND lending regulations are limiting the 24.5% affordability of London property, 22.2% and so demand for accommodation in its cheaper hinterland is growing. INNER PRIME House price growth in commuter COMMUTE LONDON locations such as Ingatestone and Chelmsford is likely to remain 25.1% 22.7% high as the demand from London workers increases.

Price growth in Shenfield and around SUBURBS other Crossrail stations should be particularly high, as the additional 25.7% infrastructure eases access to central London employment and leisure locations. n Source: Savills Research These forecasts apply to average prices in the secondhand market. New build values may not move at the same rate

FIGURE 5 Savills mainstream five-year house price forecasts 2015 2016 2017 2018 2019 5-year

East of England 3.0% 6.0% 6.0% 4.0% 4.0% 25.2%

London 0.0% 3.0% 3.0% 2.0% 2.0% 10.4%

UK 2.0% 5.0% 5.0% 3.0% 3.0% 19.3%

Source: Savills Research NB: These forecasts apply to average prices in the second hand market. New build values may not move at the same rate

Please contact us for further information Research Residential Development Sales

Susan Emmett Lawrence Bowles Daniel Gray Anne Sorrell UK Development UK Development Head of Residential Senior Negotiator 0203 3107 5460 0207 299 3024 Development Sales 01245 293 261 [email protected] [email protected] 01245 293 225 [email protected] @saemmett [email protected]

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