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Property Values – How Much is Your House REALLY Worth?

What’s the True Value of My Property?

Many homeowners think that property values and an accurate valuation is based on current local asking prices, but this simplistic approach is flawed by the vagaries of the property market. Your home is worth ‘what someone is prepared to pay on the day, given a reasonable marketing time-scale…’

If you are about to list your house for sale, the first thing on your mind will probably relate to your home’s value, it’s ‘market value’. If you’re anything like the majority of homeowners in the UK, you will probably already have an idea of the final sale price you’d be happy with. But in order to save yourself time, marketing costs and a great deal of disappointment, you should take a pragmatic approach to house selling.

Property valuing is not an exact science, and a great many issues need to be taken into consideration when trying to ascertain the market value of any property in the UK.

What’s a house worth, is it the actual market value when you want to sell or is it the price YOU want to achieve?

How much is your house worth? Any home is only worth what people are willing to pay for it at the time of its listing (putting it ‘on the market’). Your hopes for a particular property value are almost irrelevant. Unfortunately, too many homeowners fall into the trap of over-valuing their house, and wasting time and money on misguided marketing strategies.

It is only natural that you’d want to maximise the sale price your home achieves on the open market, but your own bias and skewed outlook could result in you pricing your home out of the market. If you alienate potential buyers before they have had a chance to look around your home, you could be in for a very long and stressful house selling process.

A lot of homeowners think that an accurate valuation should be based on current asking prices in the area, but the property market is too nuanced and fickle to take such a simplistic approach.

An asking price should be a starting point for negotiations; it shouldn’t represent the true market value of your property, or what you believe that value is. For instance, if you notice that a neighbour in your street has listed their house for sale with an asking price of £250,000, you should consider whether or not an extra 10 percent has been added by an over-zealous estate agent. It might also be the case that the asking price has been inflated to give the owners a little wiggle room when negotiations on price begin.

Property values in the UK rarely compare accurately with asking prices in the UK. Once you differentiate between recorded sale prices and the prices you see in estate agents’ windows, you can start to look for an accurate figure using a ‘value my property’ tool or the Rightmove website.

No estate agent or house buyer can predict property values with complete accuracy. In most cases, agents will briefly assess the key attributes of a house, and then produce a valuation that roughly sits well with Zoopla property values in the immediate area.

Either laziness or inexperience will lead many estate agents to produce unnaturally high asking prices when the local market is rising. And some unscrupulous agents might slightly inflate an asking price simply to win the account.

Estate agents can bring knowledge and experience to the table, but they can’t deliver any promises when it comes to a final selling price on the open market. Even the most experienced agents in your area will be giving you an estimation of your home’s value – something you can do yourself.

How to value your property

Rather than gathering anecdotal evidence and looking at asking prices for similar homes in the area, the best way to asses the value of your property is to research the actual selling prices of homes in the immediate vicinity. Zoopla property value refers to the recorded selling price – and not the asking price.

Property valuations – a scientific approach

Although there is no definitive way to precisely assess the true value of a property, a reasonably accurate property value estimate can be reached by taking a more scientific approach to the one most estate agents take.

Imagine a 650 square foot property in your street sold for £250,000 five months ago. If you divide the price by the square footage you can find out a rough cost for property in your area – based on space. In this case, the cost of property per square foot in your area would be approximately £384. Now, imagine you discover that your own house is 900 square feet, so multiplying the two you work out that a comparable value for your own home is £345,600.

You now need to consider what has happened in your local market during the five months since that house sold on your street. Imagine you look up house price growth on The Land Registry website, and you see that estimated house price growth in your town during that last five months stands at five percent. You should add five percent to the figure you have already calculated, giving you a valuation of £362,880.

But before you can settle on a scientifically calculated property valuation, you need to take the current condition of your property into consideration. Imagine you’ve had a good look at the house down the road that sold five months ago, and you noticed that there were several issues with the property’s windows, roof and brickwork. Because your home is in pristine condition, you should add a further 10 percent to its value, giving you a final valuation of £399,168.

While this approach to valuing your home will give you a more accurate result than simply comparing sold house prices in the area, it is still only a way to estimate what your house is likely to achieve on the open market. A property value estimator on the Internet should make this process a lot quicker.

Local market conditions can affect property values

The property market in the average UK town or city can be highly nuanced, and supply and demand for houses can fluctuate from street to street. It is usually not enough to know what is happening to property values or house prices in an urban area generally; you must delve into the detail of house prices, supply and demand in your street.

For instance, you might discover that there are already five houses for sale in your street. If this is the case, buyers looking for property in your area will have options. If the supply of available property in your immediate area outweighs demand, the market value of your home might be detrimentally affected – albeit temporarily.

It’s also worth considering proposed new developments in the area when assessing the likely value of your home. Is there a new school being planned in the area? Is the local authority making improvements? Or is a new transport link being mooted in the press?

House buyers are still a little suspicious when it comes to asking prices – particularly after so many homeowners were left with negative equity after the house price crash of 2008. If you are unrealistic with your asking price in relation to your local neighbourhood, you run the risk of alienating prospective buyers almost immediately.

Creating competition among buyers for your home will increase the selling price

The property market in the UK is a fluid entity, and what stood true just six months ago might paint a wholly false picture of the market as it stands today. A property value calculator on the Internet may be using house sales data from six months ago, which will give you an inaccurate picture of the local market – and the likely value of your property. Competition among local buyers can complicate the house selling process yet further.

A good agent will have the skill, knowledge and experience to pit competing buyers against one another. Sometimes, this might be achieved by setting an initial asking price that is at the lower end of the local price range for homes like yours. More viewings usually means more serious interest in your home, and a good agent will be able to exploit this situation to spark a bidding war between buyers.

It is usually not enough so simply call up a property sales history in your area and set your price expectations accordingly. The property market in the UK is highly complex, and house prices can fluctuate from street to street. Moreover, several issues can affect property values in highly localised areas. While it is possible to perform an Internet search using the term ‘value my property’ it’s important to remember that any property market is subject to short and long term fluctuations that won’t be used by online tools.

If you were to do your own valuation, obtain a valuation from an automated valuation model from the Internet and then ask a local estate agent in the area to value your property, the likelihood is that you’d get three very different figures.

Unfortunately, you won’t know exactly how much your home is worth until you receive the highest offer.

 

The Importance of a Prime Location to Property Values and House Prices

How Important is a Prime Location to House Prices and Property Values?

Living in a prime location can do wonders for the value of your home. Regardless of what you do to improve your home, there will probably be house prices in top location areas that are way above those possible in your area. Location is everything in the property market, and there is just nothing anyone can do about it. If your home is in a highly desirable neighbourhood, it will probably attract a premium whatever the condition. However, if your home is in an area with a poor reputation, high crime rates or a lack of excellent amenities, even the most extensive and opulent of renovations will not be enough to compete with home values in more prestigious areas. Several factors combine to make certain regions highly sought-after property locations.

How much does a prime location affect house prices and property values?

While it is possible for locations to become more desirable over time, the factors that contribute to this will usually be out of your control. According to the Channel 4 website, homes in the catchment areas of good schools can attract a premium of between 19 per cent and 34 per cent more than similar homes in less affluent areas. Many parents are selling a house and moving to areas that blessed with high-performing schools, and you could be able to command a hefty premium if your home is near one. Find out house values using our handy property valuation tool to give you an idea of the value of your home before you start relocating to a different area to be nearer a better school.

Also popular are inner-city areas that are protected from heavy traffic, noise and crime. If a neighbourhood is in a quiet prime location yet offers quick and easy access to the city centre, property prices will usually be higher than average. In London, for example, the inflated house values in the city are forcing many people to move to outlying towns and villages, and many of those areas are experiencing a new property boom.

A prime location is often relative to the individual or family, yet some amenities and facilities are universally appealing. Nearby leisure facilities, shops, restaurants and transport links are always likely to attract higher sold prices – as long as such facilities don’t detract too much from the peaceful nature of a neighbourhood. Property developers are good at monitoring new developments in residential areas, as they can often lead to sharp increases in local property prices.

Selling property in popular locations leads to higher property prices in the UK

If your property lies just outside a highly sought-after area, you still might be able to take advantage of higher-than-average house prices. Property hotspots can often price people out of the market, and buyers will often consider compromising slightly to be near their preferred neighbourhood. For instance, Chiswick in London is a highly desirable residential area at the moment, but buying a home their is prohibitively expensive for most people. However, buyers may consider nearby Acton as an alternative, as house values there are much lower.

Such is the importance of location, homes in sought-after areas can be significantly inferior to others on the market and still command a premium. Not only do these homes sell quickly, but it is also usually possible to instigate a bidding war to achieve impressive sold prices. House buyers with their heart set on a particularly prime location will often be willing to compromise on size, dimensions and features, so selling your house in such an area is often a straightforward and quick process.

The estate agent’s mantra ‘location, location, location’ may sound tired and cliche, but it has never been more relevant. Most property buyers believe that the area in which they live is far more important than bricks and mortar; in fact, many will be prepared to sacrifice space and comfort to live in a neighbourhood that suits their requirements. And if you are selling in such an area, you can use that to your advantage.

“How important is a prime location to house prices and property values?” is brought to you by Flying Homes. Call us on 0800 68 99 420 for an offer to sell your house in an instant!

Lack of Storage Space Can Reduce The Value of Your Home

How The Amount of Storage Space You Have Can Affect The Value of Your Home

Little or no storage space? Then your house value could be affected. Property values can be influenced by a variety of factors, including the amount of storage space you have. More space can increase the value of your home, i.e. add more to the market value. It is quite amazing just how many personal possessions a family can amass over the years, and it can be easy for those possessions to create clutter in a home. Modern families not only require space to live, they require storage space in order to keep the main areas of the home free from clutter. In most cases, houses can never have too much storage space, and properties that have been adapted to make the most out of available space will often attract a premium. Fortunately, there are a number of innovative ways to create storage areas out of limited space.

Homeowners who make improvements to create storage space are often rewarded with higher house values, but a little imagination and hard work is often needed to create effective solutions. A house with a loft space will always be attractive to potential buyers, as it not only provides an avenue for future expansion, it provides an immediate solution to storage issues. And the great thing about using a loft for storage space is that it only requires the minimum of work and expense in order to make it suitable.

If you are lucky enough to have a basement in your home, adapting it for storage could be a shrewd and cost-effective move adding more to the market value. According to Phil Spencer of Channel 4’s ‘Location, Location, Location’ it can cost as much as £100 per square foot to fit out a basement for habitation. However, using a basement just for storage simply requires that it is made damp-proof. But if you do decide to make your basement habitable, you can significantly increase the size of your home, and that can further increase your next property valuation.

It is estimated that 90 percent of garages are used for general storage, so homes with an attached garage often benefit from higher sold prices. Property prices where garages are attached to the main home can be up to 20 percent higher than for identical homes without garages, so adding such a facility – if there is space – is often a cost-effective way of increasing house sale prices. Converting a garage to general living space can add precious space to a home, and that is something that directly impacts house prices.

There are countless ways to be creative when adding storage space to your home. Some homes – whilst not having complete basements – do have under-floor voids that can be exploited for storage. There may also be ceiling voids, under-stair spaces and unused wall space that can be adapted. However, it is important that storage doesn’t reduce the overall square footage of your property, as that can have the opposite effect on house values.

It is vital that you at least create the impression of adequate storage in your home when selling. In reality, you may struggle to keep your possessions out of sight; however, a home that is strewn with boxes, stacks of magazines, books and general clutter will usually have a negative effect on a buyer’s attitude. When you are opening up your house to viewings, it may be a good idea to hire a self-storage facility. Possessions and inanimate objects lying haphazardly around the home can be a tell-tale sign of storage issues, so removing them could have a positive effect on your next house valuation.

Whilst storage is rarely a priority for house buyers, it could be the issue that tips the balance in favour of your home over others in the area. Homes with excellent storage facilities will usually benefit from quicker house sales than similar properties without adequate storage, and that could translate to a higher final sale price.

If you find yourself asking ‘how do I value my house before I spend money on creating extra storage space?’ Do this by researching local sold house prices and what’s selling on Rightmove or Zoopla similar to your home. Also check out Flying Homes’ free property valuation tool, this will give tyou an estimate as to how much your house is worth, saving you time and money. Blog brought to you by Flying Homes, we buy any house, for reviews see us on reviews.co.uk. Call now on 0800 68 99 420 to find out if we can sell your home quickly and with the minimum of fuss.

A new kitchen or improving one can increase the value of your home

Install a new kitchen or improve the existing one to add value to your home

A New kitchen (or refurbished) is one of the significant factors affecting a house ‘s value. Kitchens are genuinely at the heart of any family home where buyers look for somewhere to spend quality time with friends and relatives. A kitchen is seen as the essential room in the house. It is the place where people gather to discuss the day’s events over a meal, and it is quite often a home’s main reception room. Kitchens that are well appointed and well designed can add premiums to house values like no other room in the home. If you can create a warm and inviting kitchen, you have a great chance of inspiring a bidding war for your house.

Relatively small investments can make significant differences to property values

There is no need to splash out upwards of £60,000 on a new kitchen to grab the interest of buyers. In many cases, only a few minor improvements and alterations are required to make a kitchen appealing.  The effect on house sale prices can be substantial. For instance, instead of forking out thousands for a new kitchen suite, replacing the doors can be just as effective. Replace a worn and tired worktop in only two or three hours, and transform any kitchen with the addition of some stylish hanging rails and accessories.

If your kitchen is oddly shaped, it may be worth considering some structural changes to create a more ergonomically friendly layout. Buyers like space to cook and entertain, and that can be tough in an L-shaped area. There should also be dedicated space for appliances such as washing machines and fridges and, wherever possible, integrate white goods into the kitchen cupboards.

Buy a kitchen for around £1,500 in a major DIY store such as B&Q or Wickes, but remember it is often possible to pick up bargains during end-of-season sales. By hiring a local contractor to fit a new, relatively cheap kitchen, you can transform your whole home into something far more desirable to buyers. However, it is also important not to forget lighting when staging a kitchen for viewings. Many old kitchens still have pendant lights, but the installation of halogen spotlights creates the white light that will showcase your kitchen fantastically.

Functional remodelled or new kitchens can increase house values

Potential buyers often want to move into a home without any fuss or added expense, and a clean, functional and well-appointed kitchen is usually a critical factor in their decision. Although buyers don’t usually expect to see a sterile environment, they will expect certain levels of hygiene. For the best results, hiring a professional cleaning service will ensure any build-ups of grease and grime are removed – including around your cooker and extractor hood. Give particular attention to the cleaning of floor and wall tiles.

Island ranges are very popular with buyers at the moment, and they are often a critical factor in achieving quick and profitable house sales. However, the most crucial aspect of your kitchen is functionality. Is there sufficient space for food preparation? Is there room for entertaining? Are all your appliances clean and in perfect working order? According to a recent HSBC survey, new kitchens that are both functional and ergonomically designed can add nearly £5,000 to net house prices. That means spending £1,500 to upgrade your kitchen before listing your home for sale could be a cost-effective strategy.

Most buyers are usually most excited by the kitchen of a home, as in most cases it will be the most used room in the property. If you can create the ‘wow’ factor in the heart of your home, you can significantly increase the chance of a favourable home valuation when it is time to sell.

Check our other posts to see factors which may increase your house value.

Infographic – 12 tips to improve your home’s value.

 

Recreational Facilities Can Have a Positive Impact on House Values

Recreational Facilities Affect House Values
Recreational Facilities Can Positively Affect House Values

Can your proximity to recreational facilities cause an increase in your house’s value?

Recreational facilities can add value to your home and cause a welcome increase in house prices generally. Seasoned property investors will always be looking for future developments that might have an impact on local property prices, and the building of leisure centres, running tracks, public swimming pools and professional sporting stadia can all have an impact. While most of the evidence suggesting a link between house prices and recreational facilities is anecdotal, there have been two high-profile developments that have made a real difference to house sales in the area.

Is the Olympic legacy having an effect on property prices and house values?

Zoopla.co.uk recently looked into the Olympic Park in London, and it appears that local property owners are benefiting from the park’s transformation into a leisure and residential area. The Olympic Legacy Committee has a 25-year plan that includes plans to develop cultural, entertainment and sporting facilities – making the area one of the most sought popular residential areas in the capital. Renamed the Queen Elizabeth Olympic Park, it seems that people who already live in the vicinity could receive a welcome boost to their own property valuations.

Although the Olympic Games only took place over two weeks in 2012, there has been evidence of rising property prices in the area since the winning bid was announced in 2005. Lloyd’s Bank has reported an astonishing 26 percent increase in house prices over the last five years – which is unprecedented in what has generally been one of the more deprived areas of the city. Shoreditch in particular has benefited greatly from the so-called ‘Olympic Effect’ as house values in the area have risen by more than 50 percent in the same period!

During a time of recession, a lack of credit and an average increase in house values across London of only 1.6 percent, the areas of Forest Gate, Homerton and Leytonstone saw net house prices increase by more than 5 percent during 2009 and 2010. And as the development continues to gather pace, the once deprived and now hip areas of Dalston and Clapton will probably enjoy higher-than-average house price increases during the next decade.

Do new football stadia affect local property values?

The national game of football has been transformed during the last two decades, and many new stadiums have been constructed in towns and cities up and down the country. While many local residents have objected to these super structures being erected in their own ‘backyards’ there is some evidence to suggest that home owners have benefited from them in terms of average house values in nearby neighbourhoods.

A joint study by the London School of Economics and the CASS Business School discovered that house prices around the Emirates and Wembley stadiums have risen by up to 15 percent since the new structures were opened to the public. In fact, evidence was uncovered that suggested property prices within 5 kilometres of the new stadia started to rise from the moment plans were announced. The house valuation rises were outstripping natural property inflation in other areas of London – suggesting that it was the new developments that were causing the increases.

More evidence of recreational facilities’ effects

The evidence was given further credibility when homes next to the new Emirates Stadium and the old Highbury Stadium were compared. Whereas house prices around the new facility were rising, a relative decline in property values was taking place around the site of Arsenal’s old stadium. This was considered as incontrovertible proof that these huge recreational facilities were having a direct effect on net house prices in the surrounding neighbourhoods.

There are times when a house sale needs to be completed quickly. However, if you know that new recreational facilities are being planned in your area, it may be worth waiting a while in order to take advantage of any effects the new development might have on the value of your property.

Good Schools Can Mean Higher House Prices

Living in the catchment area of good schools can affect house prices
Living in the catchment area of good schools can affect house prices

The relationship between ‘high-performing’ good schools and home prices

Good schools and the British education system are always making the headlines these days. The struggle to improve education standards means every school is striving to make improvements, and that is having a direct impact on local house prices. Parents are now more aware than ever before of the various merits of different state schools, and they are prepared to pay a premium to get their children into the best performing schools in the area.

In many cases, the decision on a child’s school place comes down to which side of a street people live. And according to the property website Zoopla.co.uk, the properties located within the catchment area of the country’s top 100 schools are worth up to 25 percent more than average house values in their respective sectors. Indeed, Zoopla report that living in the south east of England, near to a top school, can double the price of property.

Are house prices near good schools recession-proof?

It also seems that homes close to high-performing schools are recession proof and benefit from higher property prices. According to Zoopla.co.uk, the desire to have their children attend the best schools is often a factor that overrides parents’ other concerns. Unfortunately, this has led to a situation where the poorest children left with no other choice than to attend the worst schools. And because school performances link to budgets, the problem may become worse.

Such is the growing importance of school performance on local house prices; estate agents have up-to-date information on catchment areas and OFSTED reports. The awareness of just how important local schools are to buyers with families is continuing to drive house prices upwards, and that is leading to mini property bubbles in some regions of the UK. Parents who can’t afford the luxury of a private education are looking for houses near good schools as a cost-effective way of ensuring their children get the best education possible.

Property values may change if a school’s circumstances change

It is important for homeowners to remember, however, that events beyond their control can very quickly change the status quo. Changes to admission rules, school closures and falls in standards can have a direct and immediate impact on local property prices. It is, therefore, important for homeowners to monitor the performance of local schools – whether those people are parents or not. It is also the case that school catchment areas are always changing to account for demographic changes and the emergence of new residential developments. A property that may have once been in the catchment area of a top school could, overnight, be in the catchment area of one of the worst.

Despite the obvious advantages of living next to a high-performing school, some mitigating factors can temper property valuations somewhat. People without children may not want to live in areas that suffer from parking problems, and heavy traffic during the school runs. There is a very real possibility that the extra noise and disruption from schools can scare some buyers off. It is also important for purchasers to remember that a good school is only one factor of several to consider when buying property. Homeowners near good schools can usually sell their homes fast as demand is invariably high. Many buyers will place offers on houses in areas of high demand without performing a complete survey first, and that can lead to future costs that far outstrip the benefit of being close to a good school.

Regardless of the underlying market conditions, it seems that there will always be a demand for homes in areas with good schools. As long as the catchment system adopted for school admissions, parents will be prepared to pay over the odds for homes in certain neighbourhoods. However, when buying or selling a property, it is important to remember all of the determining factors relating to property prices before making such an important decision.

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