It’s a common question estate agents get asked. What affects the price of a house?
If you are selling or buying property, then it’s good to have at least a basic understanding of the factors that can influence house prices. You’ve heard the phrase that it’s all about location, location, location, and to a large degree that’s spot on. However, it doesn’t quite tell the full story.
House prices are affected by a number of things. Some play a bigger part than others. Some affect properties more in one part of the country than another. But ultimately, they all have some kind of an effect.
So, lets to a closer look at what affects the price of a house. This is by no means an exhaustive list, but it does cover the main factors.
1) Supply & Demand
Perhaps one of the biggest factors, the number of properties up for sale, and the number of buyers competing for them has a major effect on the value of a home.
Generally, if there are more buyers than sellers, values will go up. If there are more sellers than buyers, the values will come down.
2) Property Condition
The condition the house is in will have a major bearing on the price it could potentially sell for. A house in near perfect condition is likely to attract a much higher price than a comparable property that still needs a lot of work doing.
Check out our guide to the most common problems with auction properties to see what could reduce the value of a house (even when not sold by auction!). Any problems you spot could be used to negotiate a lower purchase price.
3) Local Schools
This is a big one if you are selling or buying a property that’s likely to appeal to families. The performance of local schools will have a bearing on how much a house sells for.
Therefore, it’s important to keep an eye on the Ofsted reports on nearby primary and secondary schools. Generally, the better the Oftsed ratings, the higher the property prices in that area. Some sites such as Rightmove include a ‘SchoolChecker’ as part of the property details.
4) Local Infrastructure
Changes to local infrastructure can affect property values both positive and negatively. As an example, the planned high-speed railway (HS2) is set to have both negative and positive effects on house prices.
Those backing directly on to the new line may find their property values decrease from the extra noise created. Those living far enough away not to be inconvenienced by the line, but close enough to be able to easily use it, may find their property values rise as their house because more attractive to commuters.
You might think that properties in areas hit by flooding events would see their values hit quite hard for a long time. However, research suggests properties hit by flooding only suffer from a temporary reduction in value. Usually, they have returned to their original value after just three years.
Still, there is some effect immediately after flooding so if your property has been hit in the last 3 years, you may want to hold off selling for a short while.
6) Property Size
It isn’t just the overall footprint of your house, it’s also how you use the space that affects the price of your home. En-suites are seen as highly desirable so if you have the opportunity to create one it can add value to your property.
But, be careful about losing a bedroom when changing the layout of your home. Going down from a 3 bed to a 2 bed, or a 4 down to a 3, or so on, can negatively affect both the value and attractiveness of your property to potential buyers.
Generally, the more rooms the better when it comes to bedrooms, and an upstairs bathroom is a must. A lot of the other decisions (such as whether you have an open plan kitchen or not) will come down to personal preference. We’d suggest checking with an estate agent before you change the layout of your home to be sure what effect it’s likely to have on the value of your property.
7) Potential for Improvement
While many buyers are looking for a property they can move straight into without having to do any work, some buyers prefer it if they at least have the option to carry out some work themselves. This way, they can ensure it’s done exactly to their own preferences.
So, think carefully about adding on extensions, conservatories, etc. Yes, they will probably add value to your home, but, they will it restrict the options for future owners. They may also make your property ‘too good’ if it’s already quite highly valued for the area.
8) Property Features
The exact specification of your property will also affect its value. For instance, if you have a double garage, whereas your neighbours all have single garages, your house is likely to be worth a little more.
Having new double or even triple glazing can also bump up your house price, and period features can also have an effect.
9) Local Amenities
How close you are to a shop or a bus stop can also have an impact on the value of your home. Equally, how often the local buses run could also be a factor, especially if your property is likely to attract people without their own transport.
10) Parking Arrangements
Whether you have a garage, a carport, or a driveway is likely to affect the value of your house. How many cars you can park is also important as many households now have multiple cars.
If there are no parking arrangements at your property, then the ease of on-street parking could also affect the price you can sell for.
So, What Affects The Price Of A House?
As you can see, when looking at what affects the price of a house, there are a number of factors to consider. However, they are almost all linked to location. That’s why some places, such as Cheltenham in 2017, find their house prices rise more quickly than others.
If you want to know the true value of your property, the best way is to get a proper valuation carried out by at least 2-3 different estate agents. Take the average price of all three valuations and that will be around the pice you could expect your property to sell for. The agents will also be able to give you more information on the effect of the above factors on your property.
Of course, after all this, your house is only worth what someone will pay for it. So, until you list it for sale, you’ll never actually know it’s true value!