Factors Impacting Property Value
What factors can impact your property’s value
As we know, the biggest question mark hanging over property prices, as it has been for a while now, is Brexit. As we have written about before and everywhere else has commented, who knows what is going to happen October 31st. We just have to wait and see.
Property values fluctuate as a result of many factors. Historically, a solid market finds values rising, based on the economic condition of the area, jobs, availability of mortgage funds, improvements in neighbourhoods and the house itself. However, there are always other factors you can be aware of which impact the value of property and which you should consider when buying a property. We thought we would go through a few. It could help with your next property hunt.
The Waitrose effect
There had been some middle-class outrage recently when Waitrose sold off three of its stores to Lidl. People believed it would severely impact the value of their property. Homes near the upmarket supermarket chain enjoy the “Waitrose effect”, command a 12% premium (£43,571) on the average home, according to research by Lloyds Bank last year. However, the value of homes near to budget supermarkets such as Lidl rose by a larger amount than those near a Waitrose – up 15% over the past four years, according to Lloyds.
Overall, on average, living near a supermarket will mean you will pay a premium of £21,500 compared to homes in the wider area. Have a look below at the premium you could be expected to pay dependant on the supermarket:
- Waitrose = £43,571
- Marks & Spencers = £40,135
- Sainsburys = £32,707
- Tesco = £21,369
- Co-Op = £21,020
- Iceland = £17,445
The name of the street that you live on has an astonishingly large impact on the price of your home.
Research from Zoopla has found that ‘Warren’ is the most expensive, aptly followed by ‘Chase’. The former is over double the national average. Inversely, properties on roads with rude names sell for less as buyers tend to be too embarrassed to invest in them.
A local school can impact your property’s value both positively and negatively. A school with a poor Ofsted report can take up to £20,000 off the cost of the average property according to RICS. However, on the other side of that coin, a top school adds an average of £21,000 to house prices in their proximity. In years to come, this sort of impact on prices could be more prevalent with only 1 house being built for every 10 births in 2018. And with the current rate that property is being built, there is going to be a massive shortfall in the future. Without big changes, expect a sellers’ market down the line.
A local pub
Research from online agent Tepilo says that almost 25% of homebuyers like to be near a local, calling it a must when buying their next home. The figure increases by quite a bit to 35% for 18-24 age range.
The list is endless. Anything and everything can have an impact on property prices. It is all about doing as much research as you can to help you come to the right property, in the right place, for the right price.
For us at Wakeley, we take this onboard with every Life Tenancy we create. Our investments are based predominantly around the south of England where recently, KPMG have come out and said they expect little to no negative impact on house prices post Brexit. Also, with a 47% discount on average against RICS, our investments are providing a good level of protection to our investors investment and providing certainty in an uncertain market.
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