Why do some properties just cost more?
In the current market it’s a real challenge to find the right property. Not only are prices the highest they have ever been relative to average salaries but there’s a serious shortage of great homes too. Price has a big impact on whether many buyers are able to get a foot onto the housing ladder and understanding what is involved in determining property value can help you to make some savvy choices.
We all know that buying a property will likely be the biggest investment we will ever make but we are willing to go to great lengths to secure a place we can call our own. Increasingly young couples are turning to their parents to help them boost the amount they can borrow using guarantor loans or just outright lending them some cash.
So, what factors make a property more expensive?
Location, location, location is still one of the main reasons that buyers will pay more for one property over another. Transport connections, local amenities and neighbourhood all have an influence on the price of the property. For those looking for a good deal on a new home it’s often worth house hunting in “up and coming” areas where all of these things are on the horizon but not yet in place so property prices remain low.
- Supply and demand
Often, the value of property is dictated not by the property itself but whether it’s one of many options or one of few. Looking for properties in city locations can be challenging because housing shortages in the “good” areas mean that sellers can charge a lot more for those properties. You might find virtually the same property in one location where supply is plentiful and another location where there are serious shortages. Inevitably, the seller in the location where the property is one of few will be able to charge a serious premium because there will be so many buyers interested.
- Future development
Development plans around a property can change its value, both up and down. For example, if the property currently overlooks green fields but is about to have a brand new estate in its back garden then its value will take a serious dip. Development can be positive too – for example where planned development will bring new amenities and transport connections to an area that was previously remote and poorly serviced.
- Property features
The number of bedrooms, in particular, has a big influence over how expensive a property is. Anything over two bedrooms instantly spikes the cost of the property, as this is the average number. Loft conversions and basement conversions can also add value, as well as extensions that have been built onto the back or side of the property. Outside space is another feature that means sellers will often significantly increase the price of a property. This could be something as small as a balcony or as large as acres of land.
Some people will pay a premium for a view, whether that’s over the city rooftops, across a park, out over the countryside or looking at the sea. So, for example, seafront properties are often much more expensive than those a few streets back. The key is to determine how valuable that view is to you – is it worth paying over the odds for?