While there are lots of property specific factors that will affect the value of your home, such as its size and finish, there are also many external influences that will affect the price of your property.
According to John Ennis, Foxtons’ Area Director of New Homes, these are the key factors related to the area that affect your's property price.
Transport and road links
Nearby public transport and roads links are very important when calculating the price of your property. And when a landmark development project like Crossrail is constructed, this causes property prices to rise even more. According to research by Lloyds Bank**, house prices close to Crossrail stations rose by 22% from the beginning of 2014 to the end of 2016, while prices increased by 14% in the surrounding areas over the same time period1.
Shops and restaurants
The appearance of large high street chains in an area is often an indicator that an area is improving and that house prices may rise. Sometimes this is referred to as the ‘Waitrose effect’, where according to Lloyds Bank, the premium for a property close to a Waitrose is £38,666, compared to Aldi at £1,3332.
A localised emerging market is where a particular sector starts to become established in an area, attracting businesses and talent pools that further fuel growth. An example of this is the build-up of tech firms near Silicon Roundabout in the area between Old Street and Shoreditch, which is now the third largest area of tech startups in the world. This boom in the local employment market affects demand for properties in the area and therefore prices.
Water and green open spaces
Being close to parkland has a direct impact on the value of property and the improvement of green spaces leads to a rise in demand, according to research by the Forestry Commission3. Not only is green space important for recreational and leisure pursuits, it is also a key factor in improving quality of life from an aesthetic aspect.
Leisure and recreational facilities
In the same way that the choice of shops and restaurants affects property prices in your area, leisure and recreational facilities will also encourage spending and invigorate the local economy. Landmark commercial developments like Westfield have a huge impact on property prices, as convenience from amenities causes demand for homes in the surrounding areas to rise, which plays a big part in determining the value of your property.
According to CBRE, in areas where there is large-scale development, property values will increase by 4.7% above house price growth in surrounding areas4. In places like Croydon, where there are a number of regeneration projects running in conjunction with each other, this has increased buyer demand, as people look to invest in the area before the development projects are completed.
Schools and colleges
According to research by Rightmove, parents are willing to pay a £52,000 premium to live in the catchment area of an Outstanding-rated state school in the UK. If an area has a number of good-quality schools, and particularly well-established public schools, there is often a positive trend in house prices, as parents are determined to secure their child a place at a well-regarded educational facility.
Key businesses, agents and developers
In an area where there are key businesses, agents and developers, there will often be a premium placed on house prices. A great example of this is the Battersea Nine Elms development around Battersea Power Station, where Apple is building a new UK headquarters and the American Embassy is relocating. With large businesses investing in an area, this invigorates the local economy, encouraging more businesses to open and demand for properties to rise.