Your home is perhaps the most valuable of your assets. But how valuable is it to others? The resale value of a property determines your capital gains. Properties with poor resale values linger longer on the market, decreasing liquidity and lowering the asking price. You may even have to accept an offer below the price you bought your home for. Even though we don’t always have immediate selling ambitions, a good property should increase in value over the years, making it a sound investment you can rely on later on. So what really drives the value of a property up?
Heard it too many times? Yet, we cannot overstate the importance of location, location, location. It plays a significant role in property value. Desirable neighbourhoods with good local schools and proximity to amenities like parks, essential services, & transportation links command higher prices. Factors like a low crime rate can also influence sale prices positively. Countryside locations well-serviced by public transportation garner interest from families who want to forgo proximity to bigger spaces.
Even the view from the property can affect the house price. Unsightly views, views that invade privacy, or industrial sites can reduce property prices. Aesthetic views, natural landscapes, and waterfront sceneries can add value to your home. Most buyers prefer greener views, quiet streets, and close-knit communities when considering locations for family homes.
The size of the property
The size and layout of a home are important factors. Larger homes typically have higher values, but the layout also matters. Homes with functional and contemporary floor plans, ample living space, well-proportioned bedrooms, and modern bathrooms are often more appealing to buyers. A garage, monoblock parking bays, or driveways offer the added advantage of secure parking on your own premises.
Detached homes with attractive gardens rake up more value. According to a poll by the Independent, 57% of Britons would pay more for a property featuring top-grade greenery. The survey of 2,000 adults found 62% considered a tidy front garden a key feature that attracts them to properties above other factors like the condition of the roof or walls.
Condition of the property
The overall condition of a home greatly affects the asking price. Well-maintained properties with updated features, modern amenities, and attractive curb appeal tend to have higher values. Old fixtures and fittings, a weak roof, discoloured finishing, cracks on walls, rusted gutters, and loose flooring can take chunks off the price. A potential buyer would mentally calculate how much it takes to repair and will always imagine exaggerated values. If you decide to sell your property, you should carry out the necessary repair work to obtain a better Home Report.
Older the property and its components, the more expensive it will be to renovate and retrofit. The disadvantage of buying an older property is as you sell it, you will either have to do a complete overhaul or reduce the cost from its value. New homes with brand-new components will keep for longer, and at the reselling date will be relatively new.
Upgrades and amenities
A survey by the Royal Institution of Chartered Surveyors finds 61% of estate agents believe energy-efficient homes retain their value. Around 40% said they were seeing greater interest from buyers in homes that are more energy efficient.
Homes with modern upgrades and amenities tend to have higher values. Contemporary kitchens, bathrooms, flooring, and power-saving features like solar panels or smart home technology can positively boost its value. From high-efficiency windows that prevent heat loss to safety measures like smoke and heat detectors, modern upgrades make your property more relevant down the line.
The energy efficiency of the boiler can also sway a buyer. More energy-efficient heating systems are deemed worthy features. They result in lower energy bills down the line. A sustainable property is worth the money you pay for it as the home will pay for itself in the long term.
Interior and exterior design
Aesthetic appeal never goes out of style. A good first impression is down to the exterior design and curb appeal. Elegant designs that use quality materials and finishes attract the eye. A good-looking home on the outside and inside can snap up offers. An interior design and layout that maximise space, provide functional living areas, and facilitate easy flow between rooms are necessary for modern life.
More people want spacious kitchens and good-sized bathrooms. Stylish kitchens with clean lines and sleek exteriors have become living hubs in contemporary homes. Homes with open-plan designs, ample storage, and well-utilised square footage tend to have higher values.
One of the key changes we saw in the property market in the last two years is the shift in demand for homes in the country. As more people started working from home, demand for bigger homes with garden space in the relatively safer countryside increased. This newfound appreciation for space, tranquillity, and natural surroundings has not worn off. Homes in the country retain their value and have higher future prospects.
The interaction between supply and demand is a fundamental driver of property values. When demand for homes exceeds the available supply, prices tend to rise. Conversely, when the supply of homes surpasses buyer demand, prices decline.
The prices of comparable homes in the area can also determine the value of your home. Appraisers and housing market professionals use the sale prices of comparable properties in the neighbourhood to assess a property’s worth.
Interest rates set by the Bank of England impact the affordability of mortgages and borrowing costs. Lower interest rates make borrowing more attractive, leading to increased demand for properties. This increased demand can drive up property values. Higher interest rates may reduce buyer purchasing power, potentially suppressing property values.
The overall economic conditions, including factors like employment rates, income levels, and inflation, can impact property values. A strong economy with job growth and rising incomes generally supports higher property values. Economic downturns or recessions may lead to decreased demand and lower property values.
Buying a home with higher resale value ensures your purchase is a valuable investment. Who wouldn’t want to be sitting on a gold mine? When considering the resale value, the future takes precedence. New developments and infrastructure can boost home values, and so will energy-efficient homes that are more sustainable. When it comes to location, amenities, quality, and aesthetics, GS Brown homes tick all the boxes that add value to a property. How would you rate our homes on all fronts?