Where do you get the highest rental yields in Essex? 

Essex is a stunning county facing the North Sea scattered with fun family seaside days out. It is home to a myriad of local businesses in its towns, villages, and in the cities of Colchester, Chelmsford, and Southend. What’s more, in Essex, you are only a stone’s throw from London, and a non-stop train from Basildon can take you into London Fenchurch Street in only 37 minutes!

Are you interested in having a buy-to-let property in Essex and wondering what sorts of rental yields can you expect there? After all, whether a rental property is a sound investment or not will depend on the levels of rental yields you are able to make. 

Here, we at CIA Landlord Insurance, a specialist landlord insurance brokerage, have taken a closer look to tell you all about where you can get the highest rental yields in Essex.

Why are rental yields important for landlords?

A big part of making healthy rental yields and profits as a landlord depends on the amount you purchase a property for initially (albeit with cash or via a mortgage) vs. the amount of income you receive from tenant rental fees. High property prices + low average monthly rental fees spell trouble. However, lower property prices + high rental fees, and you are onto a winner. 

So, firstly, we decided to gather data on average house prices for different types of properties in local authorities in Essex.

Average house prices for flats/maisonettes are the cheapest in Tending, Braintree, and Colchester

Looking to purchase a buy-to-let flat or maisonette in Essex? Well, we can inform you from looking at local government data that on average it will cost £165,041 in the district of Tendring, which is half of how much they cost on average in Epping Forest – £342,041. Get it right and do up your property in Tendring in a way that is appealing to renters, and you could stand to make a lot of money as a landlord there. However, as we shall touch on later, you can expect to earn less from monthly rent for a property in Tending than elsewhere in Essex. 

Buy-to-let flats and maisonettes in Braintree and Colchester are also lowest the lower end of the scale, at £177,080 and £185,562 respectively. 

Property is higher priced in some areas of the county for good reasons, such as access to amenities, beautiful countryside areas, proximity to London, and transport links. For instance, flats/maisonettes may cost £212,230 to buy on average in Basildon, however, as previously mentioned, a quick direct train from Basildon and you are in London in 35 mins, so, it is very well connected. 

You will see our data shows that across the board in Essex, it is indeed much more expensive to buy and rent in Brentwood and Epping Forest, but these two lovely areas are also surrounded by acres of idyllic woodland. Hence, properties there will be seen by your prospective tenants as ‘desirable’ places to live, even if they cost a bit extra.

*Note: This data is for ‘existing’ flats/maisonettes, and not new builds*

Source http://id.esd.org.uk/metricType/5259 

It is cheapest to buy terraced houses in Tendring, Colchester and Braintree 

You have your sights set on buying a terraced house as a landlord. After all, a large number of HMO properties are terraced houses. What’s more, many families enjoy raising their young children in terraced streets with a genuine sense of community. Generally speaking, house prices in Essex and nationally for terraced houses are cheaper compared to detached and semi-detached houses. 

In Essex, we found that terraced houses are the cheapest to buy in the Tending, Colchester, and Braintree areas. On the other hand, they are the most dear in Uttlesford, Brentwood, and Epping Forest.

Source http://id.esd.org.uk/metricType/5258 

Again, Tendring, Colchester, and Braintree are the cheapest for buying semi-detached houses

Semi-detached houses in quiet neighbourhoods are pretty easy to come across in Essex. But how much will one set you back in different parts of Essex? Our research unveiled that you can expect on average to pay £277,475 to become a landlord of a semi-detached property in Tending. Colchester and Braintree came behind at £345,137 and £352,838. 

In contrast, semi-detached houses cost a fair bit more in Brentwood and Epping Forest. The average in Brentwood is £553,296 and £611,351 in Epping Forest.

Source http://id.esd.org.uk/metricType/5247 

The cheapest to buy detached houses on average are in Tendring, Castle Point, and Colchester

Some tenants love the peace and quiet that a detached house can provide for them, less need to worry about noisy neighbours. Buy-to-let detached houses will always cost you more to buy as a landlord than flats, terraced, and semi-detached houses. 

Our research uncovered that in Essex, detached houses are cheapest to buy in Tendring by a considerable amount. The mean house price of a detached house in Tendring is £389,389, compared to next placed Castle Point, where the average cost is £475,673. A detached house in Epping Forest will cost over one million pounds. 

Source http://id.esd.org.uk/metricType/5246 

Overall rankings for the cost of house prices in different areas of Essex

The data we found on house prices in the fourth quarter of 2022 led to the conclusion that landlords can buy properties for the least amount of money in Tendring, followed by Colchester and Braintree. 

Of course, being able to get a house at a cheaper cost is always a considerable benefit for landlords. However, as we shall discuss in the next section, for houses in areas of Essex that are cheaper to buy, you can expect to earn a lot less monthly rental from tenants. 

Buying a buy-to-let is a big deal, especially if it is your first time doing so. This means you must think carefully about which area of Essex you want to invest in. Look up the community, and things like shops, local schools, jobs, and the average salaries in the area. Being aware of these factors should give you a better idea of the sort of rent prices you can expect tenants to pay after you have bought the house.

Average monthly rent in Essex

The UK government deems Essex to be a county in East England. The average monthly rent in East England for all categories of property is £989 per month (according to monthly rent recorded between 1 April 2022 and March 31 March 2023). 

We decided to break down the average monthly rent landlords can expect to collect for different-sized properties in all the local authority areas in the county of Essex since there can be quite a variation from area to area. 

The higher rents that tenants are willing to pay, the better, from a landlord’s point of view. However, you need to weigh this up in the back of your mind with things like, what are the overheads involved? How much will the initial purchase price of the property be?

Brentwood and Epping Forest have the highest average monthly rent for a one-bedroom property 

Brentwood is a commuter belt town that can cater for both urban living and those who like to be surrounded by more greenery and nature. The town centre has a shopping centre, restaurants, and plenty to do. The area is also extremely well connected to London since it lies on the M25. Therefore, it is little surprise that the highest average monthly rent for one-bedroom private properties is in Brentwood.

The area with the second highest average monthly rent for a private sector one-bedroom property in Essex is Epping Forest, a neck of the woods that is home to more than 4,000 acres of old-growth forest, walking trails, rivers & ponds.

You can expect to earn the least amount in rent per month as a landlord in Maldon and Tendring, at £667 and £608 respectively. Why is this so? Well, it is true that Tendring for instance is a little more cut off than other areas of Essex and it is situated on the North Sea, which is not known for being the warmest part of the world.

Source http://id.esd.org.uk/metricType/18590 

Epping Forest has the highest average monthly rent for a two-bedroom property 

If you want to attract tenants who might have one or two children or simply want a spare bedroom for guests, buying a two-bedroom buy-to-let could be a good idea.  

The data we found showed that Epping Forest has the highest monthly rents for two-bedroom private properties, with an average of £1,260. At the other end of the scale, it is £844 for Colchester and £783 for Tendring. 

Source http://id.esd.org.uk/metricType/3477 

Brentwood and Epping Forest have the highest monthly rent for three-bedroom properties

If you want to rent to growing families, maybe you will want to get at least a three-bedroom property in Essex. The data we gathered on this one once again showed Brentwood and Epping Forest to have the highest average monthly private-sector rent. You will pay around £1,665 in Brentwood and Epping Forest.

In Brentwood, there are plenty of things for young families to go out and do, such as visiting Hopefield Animal Sanctuary or Warley Place Nature Reserve. In Epping Forest, there are endless woods and forests for kids to explore and let their energy out.

Source http://id.esd.org.uk/metricType/18591 

Properties with four or more bedrooms fetch the highest monthly rent in Brentwood and Epping Forest

Do you want to rent a buy-to-let to larger families or have an HMO for students or young professionals in Essex? Essex is home to the University of Essex, based in Colchester, so there is realistic scope for you to attract student tenants with a larger property. If either of the previous statements is true, then you may look to purchase a four+ bedroom property.

Our findings found Brentwood and Epping Forest to have the highest average monthly private sector rents for four+ bedroom properties. With the price being £2,496 on average in Brentwood, and £2,351. 

At the other end, you can expect to receive £1,424 in Colchester and £1,294 in Tendring in monthly rent for a four or more bedroom property. 

However, just remember that running a four+ bedroom buy-to-let property is no walk in the park. Seeing to maintenance and repairs is one of your fundamental responsibilities as a landlord. You can carry these out yourself, or employ the services of a letting agent or property management agency. But these services won’t necessarily come cheap, and you will have to figure out how much they eat into rental yields.

Source http://id.esd.org.uk/metricType/18592 

For the highest average monthly rent, Brentwood, Epping Forest, and Basildon came out on top

All things considered in terms of the metrics we looked at for monthly rent landlords can expect, Brentwood, Epping Forest, and Basildon were the local authority areas of Essex which finished in first, second, and third replace respectively. 

Through the data we collected, we found that the lowest amount you will make on monthly rental income in Essex is in Colchester and Tendring.

The cost of renovations for your buy-to-let in Essex

Aside from location, a lot will also depend on how nicely you look after, maintain, and upgrade the property in question as a landlord. As we previously mentioned, you need to consider your overheads when calculating whether a buy-to-let investment is truly worth your while.

One way to increase the amount of rent that tenants are prepared to pay for your buy-to-let per month is by putting your hand in your pocket and upgrading it through significant renovations.

It may well be that you are a skilled tradesperson yourself and a dab hand at household DIY. Otherwise, if you want major structural renovations such as an extension, you will have to hire a professional builder.

Here we have gathered data that provides you with how much it costs on average to cover builders’ daily labour fees in each of the local authorities in the county of Essex. This is an important metric to consider if you are thinking of hiring workers to take care of structural alterations to upgrade your buy-to-let property and you want to know how much it could cost.

Builders’ daily fees are lowest on average in Rochford, Harlow, and Maldon

We discovered that you can expect to pay the least in daily labour fees for builders in the Maldon, Harlow, and Rochford areas of Essex, with builders in Rochford charging £180 per day. As long as they do the job properly and to a high standard, more affordably priced builders can certainly help you to increase the rental yields you make as a landlord. 

The data also shows that the labour costs for builders to help you with renovations are highest in Colchester and Tendring, at £250 and £255 per day respectively. 

Source https://www.hamuch.com/rates/builder 

You will get the highest rental yields in Essex in Basildon and Harlow

To help us decide on the places with the highest rental yields in Essex, we added up the scores from our data on house average prices for different categories of property, monthly rents, and average daily builder costs for each of the local authority district areas in Essex. The lowest score wins, given that being ranked as number 1 is the best possible score.

Both Basildon and Harlow ended up in joint first place. So, are you pondering on which area of Essex to invest in as a landlord? Our research shows that you should receive the highest rental yields in Basildon and Harlow, and being just off the M25 with nice and easy access to London, these are two highly attractive locations for renters. Braintree and Rochford finished closely behind. 

Epping Forest, Essex is a gorgeous part of the world. But it came in eleventh place and proved to offer slightly lower rental yields according to our data. Why so? Well, it could largely be down to the high property prices in Epping Forest making things that bit more challenging for landlords in the area.

Methodology

For the first section on average house prices for different types of properties in each local authority within Essex, we sourced data from a credible local government website (LG Inform). We then found data from the same website to help us gather information on average private sector monthly rents in each area. 

In the section on renovations, we looked at the pricing information available for each area of Essex on the tradespeople’s website Ha Much. We then took the middle value. For instance, if it said the lowest-priced builder charges £150 per day in this area, and the highest-priced £250, we went with £200 and in the middle. 

To come up with the overall rankings, we added up the combined scores of the data from all of the metrics on property in Essex that we had gathered.

Full list of sources used

https://www.gov.uk/ 

https://www.hamuch.com/ 

https://lginform.local.gov.uk/dataAndReports 

https://www.ons.gov.uk/peoplepopulationandcommunity/housing/bulletins/privaterentalmarketsummarystatisticsinengland/april2022tomarch2023