Your home is never just your home. It’s probably the biggest personal investment you’ll ever make and you want to be sure you’ll see a return. Thankfully, picking the right place to live can help with this. Here’s our guide to choosing a location to increase property value.
Try thinking like a developer
You may live in your home for 5 or 20 years, maybe longer. You might raise a family in it. You’ll probably spend days loving it and days hating it. But it’s yours and however you view it, you will want it to increase in value, maybe not right away, but eventually.
And it’s going to need more than a lick of paint and a built-in wardrobe to do just that.
If you want to boost your house price, think like a developer – after all, profit is their ultimate goal.
You don’t necessarily have the same priorities as a developer. They are a business after all. Though thinking like they do before you make the biggest investment of your life, will ultimately pay dividends in the long run.
You want to invest small to make big. As they say in the business: ‘you need to speculate to accumulate’.
What makes a property increase in value?
There are three simple ways to add value to property:
- Increase its square footage
- But that isn’t always possible, in which case you can add value by significantly improving the internal layout, fixtures and fittings.
- If space allows and you can afford to do so, you will do both of these things in a home in an ‘up and coming’ area.
But how do you get ahead of the curve and select a location that’ll boost your property’s value?
Find an area you love but can’t afford
Location is key to a great investment.
Find an area you love but can’t afford, then look at the surrounding postcodes. Chances are you will find a larger property there at a price you can afford. Of course the area isn’t desirable yet, but give it a few years.
It takes time for the peripherals to be subsumed into their fashionable surroundings, and when that happens, the variation in prices will catch up. The number of properties in central urban locations is finite, if yours is one of them, there is only one way its value is going to go.
And don’t be put off by the run down nature of a borough – Chelsea in the 1950’s was a haven for struggling artists searching for a bohemian lifestyle, now it is the most expensive borough in London to buy property.
Today you have to look a little further out, Hackney in East London is cited as the new bohemian part of town, with green spaces and easy transport into the city.
Where is the Government spending money?
Look at where HMG is investing. Just think of the impact of the 2012 Olympic games on house prices. All areas of London that hosted an event have seen a house price uplift, since 2012, compared to the rest of the local area.
Urban regeneration schemes
These will not only give an area a facelift but they will also encourage trade, travel and retail. Simply look at Manchester city centre or Bradford’s City Park for examples of the positive impact of urban regeneration projects on run down areas.
By making an area a clean and pleasant place to live, with local amenities and better housing, people will soon flock to it, and in turn push your home’s value up.
It isn’t an overnight success story but if you’re prepared to wait it out, your efforts will be rewarded.
If you want to really get ahead of the curve, find out where transport links are being installed.
Those people who invested in property along the Crossrail line, the new London Underground Elizabeth Line, have seen house prices soar by up to ⅓ in 12 months.
Good quality schools
Check out the local Ofsted reports. Find out which schools are performing at their peak and invest in their neighbourhood.
Nothing appeals more to parents with a young family, than access to good schools.
Chances are as these young families are priced further and further out of town, access to a good education is going to tip the balance in your favour.
Changes in local trade
Keep a watch out for changes in local trade.
You know the area is on the up when the local convenience stores are being replaced with boutique gift shops and expensive looking cafes, bars and restaurants.
Savvy business owners will know where the money is, and they will be following it.
Spot signs of property investment
Get in your car and actually visit an area of interest.
Keep an eye out for other investors getting in there early i.e. skips outside of properties and scaffolding being erected – all signs properties are getting an overhaul and that things are on the move.
Try and spot developers’ signs for imminent works – they’ll be further ahead than you in the search, so hop on their bandwagon.
People who can afford a second home won’t want to purchase in a run-down area, they want to go somewhere nice at the weekend.
If you’re looking to buy out of town, these are the areas to start your search. Think somewhere with easy transport links and good amenities.
Look for land
If you find a run-down property on a large plot don’t dismiss it.
Think of the value you can add by increasing the property’s footprint or by knocking it down and building something much nicer and larger.
Are there outbuildings you can develop into holiday lets or office space?
Look beyond what is currently there.
Key tips to make the best investment
If you want to make the best investment for your future, you’re going to have to lay the groundwork now:
- Find hotspots that people are being priced out of and search in the neighbouring boroughs.
- Look for signs of development – new transport links, infrastructure and amenities.
- Treat house hunting like a business and don’t let your heart rule your head. You’re investing in your future, so make it work for you.
- Finally, be proactive and hunt the bargains. The easy properties won’t be the ones that you can add the most value to – so keep your ear to the ground.
Buying in a new area? Find out everything you need to know with Phil Spencer’s Property Report, containing vital information on your prospective new home and the surrounding area.