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The London Report: how Quantum Factors affect house prices in London

By Katie Hendra

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London is famously an amalgam of villages, merged over time into a single urban area whilst retaining distinct identities. With increasing investment in the development of London, Quantum Factors - key features such as transport, education and regeneration - now play as much a part in an area's popularity as its architectural and historical characteristics.

House hunters will always take into consideration the look and feel of an area, however, when you look deeper, the factors that contribute to an area's appeal can often be quantified.

Our 40 years of expertise in the London property market and our analysis of our buyer pricing data, we are able to understand the core factors that affect the popularity, and therefore investment potential, of an area. We call these Quantum Factors. Quantum Factors determine the character, attractiveness and practicality of a London locality.

Quantum Factors are the elements that play a key part in resident's day-to-day lives. From transport and infrastructure to local employment and leisure, Quantum Factors are key features of an area, and therefore have a direct affect house prices.

This structured thinking helps to explain why some parts of London consistently outperform on price and popularity and define what gives a London locality its unique identity. Foxtons’ New Homes teams use this tool to advise developers on place-making and, when understanding planned development of these factors in an area, where best to invest. This tool can also be used by those looking to buy a property with a view to benefitting from potential increase in value by understanding how the wider market in that area may be affected in the long term.

Quantum Factors in action

Below, we look at three examples of how Quantum Factors affect different areas in London in different ways. This tool helps provide a profile of an area and easily understand how the future of the area may be shaped.

These three areas; Croydon, Tottenham/Seven Sisters, and Wembley, may not be obvious choices for hunting for your next home, but if long term capital gain is a consideration for you, the Quantum Factors associated with these areas should not be ignored. New Homes developers, along with Build to Rent investors, have already highlighted these areas for investment based on factors including transport and infrastructure; tech, finance and emerging markets; regeneration; and leisure facilities. With average property prices being lower than the capital’s average for buyers, areas with a selection of Quantum Factors should not be dismissed, even if it may not be where you initially started your property search.

Tips for using Quantum Factors to your advantage

Our top tip for using Quantum Factors to your advantage is to make sure you have a good idea about any planned developments of an area. You might find out that a tube line extension has been approved, or that a new shopping centre is in the pipeline to be built. These changes will bring new people, companies and jobs to an area. A bit of research can go a long way.

Be patient but move quickly - developments of this size are not quick to materialise, but the impact of them will be felt from the moment they are announced. As soon as the plans for Crossrail were announced, prices in areas served by the service increased almost overnight. Whilst residents in these areas may still be waiting to make use of the, now named Elizabeth Line, many of them will have made sound investments in the meantime.

To view the full London report which discusses the London market post-COVID 19, as well as the Prime, Build to Rent and New Homes markets in London, click here.

For help getting your property search, sale or let started, contact us today.

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