Wherever you live, property valuation can be complicated, but when you get into a major, modern metropolitan area like London, that complexity only rises. With so many people working in so many fields across such a compact area, not to mention all the sites of architectural and historical interest, there are a huge number of variables to consider.
When you get right down to it, however, property valuation usually comes down to three important metrics and those are what we’ll be taking a look at today.
1. Trends In The Market
As with any market, the housing market certainly has its trends and if you want to find the least predictable factor in property valuations then look no further. While market trends are sometimes large-scale and easy to assess – such as the relative decrease of urban properties as a result of remote working practices following the COVID-19 pandemic – others can be far more subtle.
From legal changes to lifestyle trends, the market can shift in ways that might not make sense even six months in advance, let alone years.
2. Condition and Size
A far more predictable and generally accurate metric is the condition and size of a property. Not that these can’t fluctuate over time either.
A property might be in useable or even good condition, but if the style looks out of date then this can affect a property valuation significantly. Size, on the other hand, is generally always a good thing and more so now than ever before. Over time, in fact, as properties have trended smaller and smaller, size has become more and more valuable.
3. Location, Location, Location
Last, but certainly not least, location is an enormous factor when it comes to property valuation. In fact, it’s the single largest metric by which a property’s value can change.
In London, in particular, properties are famously more expensive the further you get into the city because of the value of being close to such a major urban centre. Even within that environment, even more value will be placed on things like proximity to local transport networks and major landmarks. Valuations often also go up if a property is built near to a waterfront.
Overall, the logic of property valuation can be summed up with one simple question: why would someone want this property?
Naturally, although the answer to that question can change over time, the underlying logic is usually the same. People place value on a home that is conducive to their lifestyle. Usually, that means being near to where they work and having the space and facilities they need. If you’re looking to improve the value of your property then the best thing you can do is understand the demographic who’d be interested in purchasing/renting.