More Colchester homes drop in value than most of UK, says Zoopla

More than two thirds of homes in the city have experienced value decreases in the six months to May this year, according to the online property portal Zoopla.

With 67 per cent of properties falling in value, it is the area of the UK with the second highest concentration of value decreases, with West Central London just one per cent ahead.

It is a shocking statistic when compared to the rest of the nation, with 66 per cent of British homeowners seeing the value of their home increase in the last year, despite tough economic conditions.

Nationally, homeowners whose property has fallen in value over this period have seen an average fall of £7,700, or around £21 per day.

Zoopla said the highest concentrations of homes falling in value over the six months to May tended to be centred around coastal locations across southern England.

Boasting an array of nearby seaside towns, like Clacton and Harwich, Colchester experienced a rush of buyers during the “race for space” seen during the coronavirus pandemic, which previously pushed house prices higher as people made lifestyle changes and worked from home more often.

'How can this go on?'

Speaking to the Gazette, a Colchester homeowner said she was “very worried” by the shift in the housing market.

She said: “I’ve reduced my property by £50,000, but there is only so far I can go down.

“My agent said to me if I can hold out things will turn around but I can’t see a light at the end of the tunnel.

“How can this go on? People will end up losing their homes with high interest rates, a rising cost of living, but no wage increase.”

It isn’t just those looking to up sticks who are impacted by the drop in house prices – as those wanting to remortgage could be left paying a higher interest rate if their home has dropped in value.

Average fixed mortgage rates have recently jumped back above 6 per cent after previously hitting that mark last autumn, amid the market volatility that followed the mini-budget.

'It's not all doom and gloom'

Despite the glum figures, an estate agent insists things aren’t so bad for the city’s homeowners.

Estate agent Charlie Morgan, who is the boss of Colchester-based Oakheart Property, said his firm achieved record numbers of sales last month.

Estate agent - Charlie Morgan (Image: Charlie Morgan)

He said: “I think a year ago probably portrayed a false economy. We’d put a property on the market and it would sell within two to four weeks.

“Now our average transaction time is between six and eight weeks, so things are definitely taking longer, but it isn’t all doom and gloom.”

The property expert added the average price of a three-bedroom semi-detached house coming to market in Colchester last year was between £25,000 and £40,000 less than what they’re seeing today.

His colleagues have also seen a “high volume of people coming to Colchester from areas like London, Kent, and Cambridge”, with areas like Stanway, Copford, and Prettygate experiencing price increases as demand rises.

Colchester mortgage broker offers advice

Mortgage broker Gemma Cuff, who runs Gemstone Mortgages, in North Hill, Colchester, said the mortgage customers hit hardest will be those who bought their home during the Covid lockdown's property surge.

Mortgage expert - Gemma Cuff (Image: Gemma Cuff)

She explained: "A lot of clients due to remortgage now initially fixed their mortgage five years ago and they have not seen a negative change in the house price in that time.

"The main people that will be affected by these price decreases are those that bought their property at peak prices two years ago.

"Our advice is to speak to a mortgage adviser six months prior to your rate ending."