Property values change a lot.
This change is driven by some factors you can control, and many you can’t.
Read on to find out what affects property value.
Internal factors
Property condition
Being in good condition adds value to a home.
This doesn’t mean that those in bad condition can’t be sold.
In fact, sometimes the costs of improving a property’s condition can’t be recouped with a sale.
Property type
There are many different types of property in the UK, from studio flats to detached houses.
The relative difference in value between each type is consistent across most places.
Property ownership type
There are several models of property ownership.
The two most common are freehold and leasehold. Freeholds are more valuable than leaseholds.
Lease length
The time left on a leasehold property can affect its value.
The shorter the time left, the lower the property’s value will be.
Some mortgage lenders won’t even lend to home buyers on such a short lease.
Asking price
Setting an accurate asking price for a property can make a big difference to it’s perceived value.
If you price it too high, it will likely sit on the market for a long time. This in turn might make potential buyers suspicious of its value.
Staging
Staging a property refers to how it is set up before viewings. It includes tidying up, cleaning, arranging furniture, and more. Even a garden should be prepared.
Staging a home well won’t likely increase the asking price. But it will make potential buyers more likely to meet it.
Negotiations
Negotiation impacts the final selling price of a property.
The impact it makes is measured by the difference between the asking and selling price.
External factors
Neighbours
Bad neighbours can negatively affect homeowners’ lives. They can do the same to property values, too.
Serious neighbour disputes must be declared when selling a home. They won’t necessarily prevent a property sale, but they may lead to a lower selling price.
Curb appeal
Curb appeal is how a property looks from the outside (i.e., street level). It includes neighbouring properties and public spaces (i.e., the street itself), too.
Flood risk
Floods can have had a disastrous effect on homeowners and residents.
The Association of British Insurers estimates average flood damage costs are between £20,000 to £40,000.
Local market conditions
Properties are part of local property markets. High demand and limited supply can drive prices up. And economic downturns or oversupply depress values.
The wider local economy can also influence these factors. If large local employers have opened or closed, property prices may respond accordingly.
New developments in your area
Existing or upcoming developments in your impact your property’s value.
These can range from positive developments. For example:
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In the early 2000s, a typical 3 bedroom flat in King’s Cross would have cost around £200,000. Six years later regeneration in the area has helped push that value up to around £600,000.
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In 2006, a three-bedroom property in Shepherd Bush was £575,000. Two years later, White City’s Westfield Shopping Centre opened. By 2015 the same property figure soared to £1,350,000.
Smaller developments, such as schools, also help.
Some developments are considered more negative. For example, if a new major road is set to appear, residents may experience noise pollution.
National market factors
Very few properties escape wider national property trends. Of course, they may be influenced by different degrees.
National property values in turn driven by:
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Economic growth (or lack thereof)
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Employment rates
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Interest rates.
Housing supply and government policies also play significant roles.
