If you are a homeowner and you are considering buying or selling your home, then you must be thinking what are the factors that outpace the value of your property in comparison to the market value. According to the research and market analysis conducted by Berkhamsted estate agents, the current increase in property values all over the U.K. is due to factors of supply and demand. While it is a legitimate reason for house prices to climb, some more important factors contribute to the increase in price, which we will discuss in this post.
Let’s jump right into them!
1. Location of the property
One of the most significant driving factors for house prices is the location of the property. It also determines the value of a house in the sense that it doesn’t undergo appreciation. Although the physical characteristics of the house succumb to depreciation, the property appreciates. This is the prime reason why location is a key factor in helping increase the price of a property.
Moreover, when it comes to urban home locations that are close to offices, restaurants, shopping malls, and recreation centres tend to hold on to a high value no matter the market price. Again, the demand for rural homes is also increasing as there has been a significant rise in the work-from-home culture and remote education, and homebuyers are opting for more space so that people can work and play and relax at the same time.
2. Supply and Demand
Demand and supply have been pulling the chains of the housing market for a long time. When there is a shortage in the supply of houses, there is a shortage of inventory. This leads to an increase in the value of homes.
When there is a shortage in inventory, then there will be fewer sellers in comparison to buyers. At times the complication increases when there is also a lack of building materials and skilled labour who are required to build a new home.
3. Comparable real estate properties
Whenever there is an increase in the sale prices of properties that can be compared, the property value automatically increases. Comparable real estate properties are those properties that are located in the same neighbourhood and have similar features and similar conditions of the property. Real estate agents make use of these comparable values when deciding on a listing price for a property.
4. Size of the property and amount of usable space
Homes with higher usable square footage tend to thrive in the market and fetch greater home value in the eyes of buyers. If there is additional space in the house that can be converted into a home office, consider the value of your property to rise even further.
5. Age of the property and its current condition
Since there is noticeable depreciation in the physical characteristics of your home, it is obvious that a new house or a well-maintained house will fetch higher value in comparison to old and dilapidated properties. Any older home which has a strong and sound foundation, structure and systems that are functioning will produce a higher value.
6. Upgraded properties
If you are planning out your remodelling and revamping projects properly, then it will improve the value of your home and raise its marketability. Adding modern features and layouts and keeping the energy efficiency updated is another key point in adding to the market value of your property. Some common DIY projects of remodelling include landscaping, a kitchen remodel, new appliances, etc.
7. Rate of interest
Whenever the mortgage rate falls, the price of properties increases. Homeowners can now afford to upgrade their homes to larger ones or step into the modern home market. This leads to an increase in the value of homes.
Nothing boosts home value more than a healthy economy. Whenever there is an increase in the percentage of employment, the number of individuals who are capable of affording a home increases. A healthy economy consists of confident consumers, and it also attracts more buyers to enter the real estate sector. All these factors come together to increase property values.
We hope this post has been helpful to you in finding indicators that help you raise your property’s price.