What Affects a Property’s Valuation?
Selling a home is a big life event, and on average, most people in the UK will relocate their home around 8 times during their lifetime. When moving home, most people look to maximise the amount they will receive for their property, and there are several factors which can affect the valuation of a property. In this article we explore the main factors that Valuers will consider when valuing a property.
So, whether you are just curious to know what impacts the value of your home, or perhaps you’re considering buying a property, or you’re a homeowner, prospective buyer, or just interested in real estate, this guide will hopefully provide you with some insight.
Factor 1: Location
When considering the valuation of a property, location is the most important factor that a valuer will consider. Desirable locations, such as those in close proximity to city centres, sought-after neighbourhoods, or areas experiencing growth and regeneration, tend result in higher valuations.
When assessing the value of a property, the valuer will consider many factors. Including proximity to local transport, proximity to schools and offices, presence of open spaces such as parks and entertainment facilities and proximity and quality of local amenities.
Popular areas around the country include coastal locations, areas of outstanding natural beauty and areas that are popular for holidays. These locations will have increased demand and the valuer will allow for this within their assessment.
On a more negative note, valuations can be affected downwards where there are poor schools, high crime rates, late night establishments in close proximity or being too close to public transport. Living near public transportation might help enhance the valuation. However living close to congested roads, airports, or railroad tracks can produce a significant amount of noise, making your home less appealing to potential buyers.
Factor 2: Size and floor area
After assessing the location of the property, the valuer will then likely consider the size of the property.
It probably goes without saying, but we will say it anyway, the larger the property, the higher the market valuation. Typically, more bedrooms and bathrooms generally increase a property’s valuation. A valuer will assess the size of the property and compare it with similar properties in the surrounding area. If the property is larger and can provide more space for potential purchasers, it is likely to result in a higher valuation. Over the last five years, the ability to work from home has increased significantly. Valuers will consider the possibility of extensions, conversions and external space when calculating a valuation.
For some properties, typically city centre or built up areas, external space can be as important as internal space. Having a garden, garage, off-street parking and additional outbuildings for storage are all in demand. The valuer will consider all of the aspects when calculating their valuation.
Factor 3: Property condition
After assessing the location and condition of the property. The next major factor a valuer will consider is the condition and character of the property. Property condition influences residential property valuation significantly. Typically, a well kept, good conditioned property will result in a higher valuation. Conversely a poorly kept property in need of repairs and upgraded will result in a lower valuation. As property owners, ensuring your home’s upkeep protects its value.
You may have heard of the term ‘Kerb appeal’ and 68% of home buyers think kerb appeal is important when buying a home. Kerb appeal typically means the property looks attractive from the outside. The most important features are well-maintained windows, a roof that appears in good condition, well-maintained front garden, pathways and fences, in addition to a well-painted frontage. A valuer will consider the property’s kerb appeal as part of their valuation process.
Maintaining a property in good condition can be costly. But it is likely to pay dividend when the property is advertised and being sold.
Factor 4: Market conditions
Market conditions play a pivotal role in property valuations. With supply and demand dynamics, interest rates, and broader economic factors all having substantial impacts on a property’s assessed value.
Market conditions is particularly important in residential property valuation. The valuer will consider several factors including current housing market trends, local supply and demand and current and past interest rates.
Property valuation conclusion
There are many factors that affect a property’s valuation, and we have provided some insight to some of the more prominent ones. This article is aimed at providing a brief overview of different factors which should help you understand how a valuer assesses and calculates a property’s valuation. Further factors will be considered, and discussing the process with the surveyor and/or estate agent will shine further light on the process.