House Prices

Everything you need to know about house prices

Maybe you are looking to sell and want to know local house prices. Or are you buying and wanting to know the prices of houses in the area you are looking at. A price comparison is the best starting point whether you are looking for house prices in London, house prices in the UK or are wondering “what are house prices in my area doing?”

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Back to topDIfferent types of House Prices

There are three different types of house prices and each is as important as another when considering the value of a property:

  • Market Prices
  • Sold Prices
  • Asking Prices
  • Market House Prices

This is defined as the price the market would set for a house price. That is the point at which a buyer would be willing to buy a price. This is the hardest price to qualify before a property is on the market as estate agents and owners of property can’t be exactly sure where the market is at any one time. The market price can be affected by almost anything: economic outlook, the weather, stamp duty changes, political changes and everything in between.

  • Sold House Prices

Sold prices are the easiest to quantify but the hardest to find. This is the price that a property actually sold for. It is recorded by the Land Registry and is free to access to the general public and estate agents alike. The only slight problem with sold prices is that they are only reported about three months after a property has actually sold. These house prices are absolutely finite and a great way of helping judge the value of a property.

  • Asking Prices

An asking price on a house is set by the owner of a property and their estate agent. In a perfect world this would be aligned with the market price of a property. Unfortunately, without perfect knowledge of the market, estate agents and owners alike are left slightly in the dark and can provide an educated guess at best as to what the market price is. Far too often the original asking price on a property will be far in excess of the market price and certainly more than the sold prices within an area.

Back to topWhat factors affect house prices?

  1. Location


A report by Savills Estate Agents in 2015 showed that properties close to good schools can see an increase in their price of up to 25%. This makes sense as you are widening the appeal of your property to those with children.

Local Amenities

Do you live in a market town or in the middle of nowhere. Whilst rolling countryside views may appeal to certain buyers there will be plenty who would like local shops within walking distance as well as a local pub or restaurant.

Lloyds Bank produced a report in 2015 that showed that a Waitrose in your local area added 12% to your house price.

Transport Links

IN London if you are near a good tube station or have great bus routes then you can expect a very stable and steady growth on your property. Look at the impact of Crossrail on house prices in East London as an example. Good transport links can change an area from being low in demand to being the latest hot spot.

2. The Property Itself

The size of the property including the number of rooms will have an enormous bearing on the value of a property. This makes sense as you would expect to pay more for a house with three bedrooms rather than two bedrooms!

Additional factors such as the condition of th eproperty - does it have a new kitchen, under floor heating, space to park a car or even a garden?

According to recent research a tidy garden could add up to 20% on your house price. The amount a garden adds to house prices is directly related to how rare gardens are in the area. If you have a huge garden in a heavily built up area that will be worth far more than a small garden in a country location where everybody else owns multiple acres of land. It's all relative

House Price Relativity Quote from Einstein

3. External Factors:

Interest rates/mortgage rates

The availability of affordable credit has a major impact on how many buyers are in the market. If mortgages are hard to come by then there will be less qualified buyers out there trying to buy homes which can only lead to reduced house prices.

Economic stability and economic growth

Buying a house or home is a major financial decision which means buyers need to know that their investment is safe. Likewise owners want to know that they are selling at the right time and more often they will also need to buy a property to move into.

Political stability/outlook

Are we looking at a change of government? Are things about to change massively and affect decision making by buyers and owners? People love stability when making big decisions so in times of unrest and political change, property transactions will decrease and add to market volatility.

Stamp Duty

This is the amount of tax that buyers will need to hand over to the government for buying a house. In 2015 there were major changes to how Stamp Duty was calculated. Since the change, anyone buying a property below £1m is in a better position. Anybody buying a prime property has been hit harder and affected house prices above £1m.

Ratio of house prices to earnings

As house prices rise relative to earnings the demand for housing will go down as more and more potential buyers are priced out of the market. At the height of the 2007 boom, this ratio hit 5x earnings (average nationwide) which led to houses being deemed too expensive, there was a fall in demand and house prices corrected. This ratio has been above 6 in London since 2010!

Back to topHouse Price Valuation

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