In Boris Johnson’s recent address to the Conservative Party Conference, the current Prime Minister laid out his vision to get an increasing number of younger people onto the property ladder and buying homes. This, as opposed to being stuck within an endless cycle of rentals. It’s a dream held by many people, both old and young alike. The price of that dream, however, very much depends on the market conditions at the time. The housing market is an inherently changeable one, and its fluctuations have frustrated both buyers and sellers for decades. There are, however, some more ‘universal’ value drivers of value, which are worth looking at. With that in mind, the team here at Munday + Cramer, a multidisciplinary architectural and building surveying practice, in Essex, wanted to examine what most informs a property’s value, as it stands.
You need only take a brief look at HM Registry’s UK House Price Index to see just what a big impact location has on a property’s value. We can see from June’s HPI that, unsurprisingly, London has the highest average house price, coming in at £490,495. An eye-watering amount of money in its own right, but especially when compared with other regions in England. A quick drive out from the metropole and up the A1, for instance, and the average house price plummets; the average house price in the North-East, for instance, comes in at much lower £131,742. Location, location, location might be an old phrase, but it’s one which still clearly very much holds up today.
Proximity To Amenities
The location of a property, in relation to local amenities, can have just as significant an impact on a home’s value, as does its broader geographical setting. Living nearby to both certain high-end, and the leading budget supermarkets, for instance, has been found by Lloyds Banking Group to significantly drive up a property’s value. Falling within the catchment area of a well-performing school is known to similarly bump up house prices. The Department for Education (DfE) gathered data, in 2017, and found that house prices near the best-performing schools (both primary and secondary) are significantly greater than those homes that aren’t.
2. Garden Space
Even before the lockdown made us all realise just how important access to fresh air and an outdoors space really was, the effect of green spaces on property premiums was well-documented. In fact, back in 2019 the Office for National Statistics released a report on this topic, and found that in urban areas, the closer a property was to a green space, the higher the premium on the property (£2,500 higher on average for properties within 100m of a green space, when compared with those further than 500m away).
Whilst not enough time has passed yet to collate the kind of quantities of data required in order to properly gauge just how much the Coronavirus will inflate the significance of ‘green space’ as a valuation metric, we’d wager you’d be offered fairly short odds if you were to bet on properties with access to green spaces continuing to increase in value, in the future…
Manicured Means More Money
Now, we’re not saying you have to get your garden to win ‘Britain’s Best in Bloom’... But a little bit of maintenance work on your garden space can go a long way. Well-kept gardens can often increase a property’s value by a massive 20%. A good way of looking at your garden is to treat it as another room of the house. Would you leave one room trashed when trying to sell a home? No, of course not! So there’s no reason why your horticultural hotbed should be any different.
3. Size (But The Layout Of Space, In Particular)
It might seem an obvious one, but it’s worth reiterating that size does matter, however, the extent to which it affects a property’s overall value is more debatable. If you look at the real estate market, over in the United States, for example, then all you’ll hear about is square feet. ‘What’s the square footage on this?’ is one of the questions most commonly put to US estate agents or ‘realtors’. Over here in the UK, however, the way in which space is utilised is arguably just as important in the determination of a property’s value as are the basic dimensions, themselves. A smaller, but more intuitive and well-thought-out property, can quite easily end up commanding a higher price than a clumsily put together, larger property.
New-build properties have for some time now had to conform to certain energy efficiency standards when built. However, that still leaves a vast swathe of older properties, nationwide, which have poorer EPC ratings. The question is, then, does this affect their overall value? Interestingly, the answer isn’t as clear-cut as you might think. A 2019 study by industry body RICS found that whilst a property’s efficiency is beginning to more significantly impact upon its fiscal value, it still pales in comparison with traditional drivers, mainly due to the effects of regulation and the attitude of lenders. This is at odds with much of the more generally accepted consensus. A consensus that purports a clear correlation between higher EPC ratings and higher property value. Regardless of the degree to which efficiency affects valuation, it’s a good idea to have a more efficient home, anyway!
Retrofitting And Home Improvements
In terms of the value of retrofitting, in particular – installing insulation, boiler replacement, more efficient bulbs, solar panels, etc. – the Department of Energy and Climate Change (DECC) has said, previously, that making efficiency improvements to your home can improve its value to the value of £16,000. If improving your home’s energy efficiency is something you’ve been mulling over for a while, then it’s worth having a building surveying team carry out an energy audit for you.
Contact Our Building Surveying Firm
It will be interesting to see just how the valuation landscape continues to change in the coming years. Even more so given the year we’ve had, this year! So, if you’d like to find out more about any of our Essex-based services, which range from architectural design to building surveying and facilities management, then get in touch! Contact Munday + Cramer today on 01245 326 200.