Property value is one of the most important considerations when buying or selling a house. People often align their decision to sell a house with whenever they think it will sell for the highest price – and similarly, most homeowners will make changes to the property, to maximise its value, in the build-up to selling.
On the other hand, prospective buyers often only enter the market when they think that property value will be at a ‘low’. But is it only external factors which causes property value to drop, or are there things homeowners do which we detrimental, too? Read our blog below for an outline of all the different things that increase, and decrease, a house’s value.
What Increases Property Value?
The general trend of the last 50 years is that property value increases over time. Therefore, if someone purchases a house and lives in it for at least 10 years, they have always historically noticed an increase in the property’s value. With that being said, there are other factors which increase house value.
Small changes such as cleaning your property, or repainting worn-down walls, can have a positive impact on the value of your house. These are also relatively inexpensive improvements to make. You should keep an eye out for any other possible small fixes, such as limescale build up in bathrooms; squeaky flooring; dirty carpet; or broken lightbulbs.
Homeowners often invest in more expensive house changes to add value. For example, paying for a new driveway if your current one is dusty, uneven and old, is commonly done just before the time arrives to sell a house. If your house does not currently have a driveway, then you may wish to consider adding one for the first time.
Lots of people also invest in an extension – particularly for their kitchen or conservatory room – as this will add to the property’s value. Before jumping into these changes right away, you should speak to experts and ensure that the amount you spend on making these additions is not greater than the value it will add to your house.
Another popular investment is a loft conversion. These tend to be less expensive than an extension but still add value to your house, because a new room is being added. Furthermore, loft conversions often do not require planning permission, because the room is already there.
There are external factors, too, which add value to a property. If demand for a new house in your area is high but supply is low, then your house’s value will typically go up. Likewise, if there is a ‘local buzz’ which makes living in your area desirable – perhaps the nearest school has ranked highly in the national rankings, or perhaps your village has been named ‘one of the happiest places to live’ in the UK – then this will positively impact your value, too.
What Decreases Property Value?
There are lots of external factors which may decrease a property’s value. If the economy is in a recession, then most people will have less money readily available, and the bids on properties tend to go down during this period.
Local changes may also drive down your house’s value. For example, if a new railroad is being built at the back of your garden (adding lots of noise) or new streetlights have been added which create light pollution through your bedroom windows; then these are factors which potential buyers will consider ‘damaging’.
Other neighbourhood issues which may reduce your property value includes crime levels going up; a history of flooding in the area/street; poor broadband access; or a local high street being slowly closed down. While some of these factors may seem insignificant, these are all considerations for people valuing and buying houses.
Sometimes, changes you make to your property can negatively impact its value. If you have allowed the house to be worn down – for example, dirt on the walls; paint peeling; or an unkempt garden – then this will decrease your property’s value.
You can also experience a decrease in house value if you have a low energy efficiency rating. In the modern day, some buyers care deeply about environmental issues like this.
Likewise, if there is lots of clutter in your property, or you have ‘overpersonalised it’ – for example, bright pink paint has been used everywhere which is not to the buyer’s taste – then this will decrease its value, too. Overpersonalisation is a common reason why property owners struggle to sell their flat fast.
Your property’s value will also decrease if you have a dispute with your neighbours. The new owners could be inheriting this dispute, whatever it may be, and therefore will consider your house less valuable because they do not want to go through the hassle. This may result in you struggling to sell your house.