Sales Trends - Property Market Update
How much is your home worth?
Dated: 26th September 2007
Regional house price monthly increase based on average size and condition
Average size: 3 bedrooms, freehold.
Herefordshire: £1,100 (avg) per month
Monmouthshire: £1,250 (avg) per month
Blaenau Gwent: £500 (avg) per month
*Pembroke Road, Muswell Hill, London N10: £2,400 (avg) per month.
*To evaluate a whole region takes longer to do as you need to repeat
the formula several times covering the whole region. Furthermore Pembroke
Road is in Muswell Hill, Muswell Hill is largely in the borough of Haringey
however Pembroke Road is not, it is in the borough of Barnet
Here is a formula to use to calculate the likely selling price of your
home in the UK. (Without asking 3 estate agents through your door). Or
if you can't sell your house why not try this to see whether your estate
agent is living in cloud cuckoo land or if you think they are too conservative
on value.
Our Formula
If the property markets stalls or crashes then take between 12 &
24 month off today's price.
You will need to access the following web sites: nethouseprices.com and
rightmove.co.uk (there are other web sites you can use for this but in
my experience I have found these particularly easy to use).
A) Go to rightmove and find a similar house for sale in your road with
the exact same number of bedrooms (if rural then up to 5 mile radius).
B) Using the nethouseprices web site look at a selection of other properties
sold in your street or location (within 5 miles if rural) in the time
frame of 2002 to 2007.
C) Now look for properties that have sold more than once since 2001 and
2007. The more rural, the wider you may have to go, or go to your nearest
town and work on properties that have matched your house price previously
within the last 10 years. This may not seem very accurate but try it anyway.
Example
For this exercise we will look at Muswell Hill, North London, post code
N10. Target property 3 bedroom terraced. Exact location: Pembroke Road.
Rightmove offers 1 property under offer at £450,000 The property
has been extensively modernised and decorated and is offered in well above
average condition.
Nethouseprices offers 64 properties sold and I noticed that number XX
sold in June 2006 at £365,000 and had sold previously in March 2004
at £307,500. Therefore in 27 months it increased in value by £2,200
per month (AVG).
I also found XX sold in January 2005 for £370,000 and sold previously
in August 2000 (not 2001) for £228,000 giving a monthly increase
of £2,600.
My third comparison is a flat at XX Pembroke Road, which sold for £182,000
in June 2005 and had sold previously in July 2000 for £112,00 with
a capital growth of £1,200 (AVG). However the same flat sold in
between in July 2001 for £131,000 therefore had an increase in value
of £19,000 in 12 months or £1,600 (AVG) per month.
We can look at other examples but it suggests already that houses in
the street increase in value far greater than flats by up to £1,000
per month (AVG). You will notice I am taking average figures all the time
- houses £2,400 per month and flats £1,400. You should also
note that a flat can have other influences, such as length of lease and
service charge, if the lease is very low and the service charge very high
then the monthly increase in value may be severely affected.
Is this enough to calculate a likely selling price? This will be enough
for this exercise but you can add another 1 or 2 examples just to be safe.
3 houses in Pembroke Road sold in 2004 in (we assume) average condition
for £330,000 as an average price, 2 at £350,000 and 1 for
£307,000 (there are another two that sold for a lot less but I suspect
they may have been sold privately to family at a cut price).
Take the mid month of June 2004 and then apply today's date September
2007, this gives us 39 months at £2,400 per month (AVG) or:
£93,600 + £330,000 (average sale price in 2004) = £423,600.
So we now have a base line figure for a very average terraced in Pembroke
Road, North London. Next we add and take away from this figure according
to the actual property.
We can add the following in values of £5,000 and £10,000:
Brand New Kitchen - up to £10,000
Brand New Bathroom- up to £5,000
Brand New Roof- Up to £5,000
Property USP (something particularly unusual or unique to the property)
such as newly refurbished throughout or some kind of architectural addition
(extension, loft conversion, conservatory) - up to £10,000. If it
has had two of the three possibilities - between £15,000 and £20,000.
Take away from £423,600:
Kitchen older than 20 years - £10,000
Bathroom older than 20 years - £5,000
Roof/wiring/plaster work in need of updating - up to £10,000
Any structural work that may affect mortgage offer - up to £10,000
(if it's multiples of new roof, re-wiring, damp proof course etc. - take
off £10,000 plus another £5,000 for each major work thereafter.
OK, so how accurate is this? Well I live 150 miles from Pembroke Road
and I do not know anyone living in the street, but having 27 years Estate
Agency experience I am pretty sure this isn't very far off. You can always
round figures up or down a bit according to how you think the price is
working out, but try to keep it within £10,000.
Try it yourself!
www.arlets.com
Please note: This formula is not 100% accurate, but an excellent rule
of thumb. If you find your results are wildly different to either your
expectations or your estate agent's suggested figures then please ignore
this. However I have been testing this formula for the last 3 years with
surprisingly accurate results
If your specialist market is seeing either an improvement or downturn
in fortunes, tell us and we will post your
report on the TRENDS pages (www.saleswork.co.uk/trends). We will include
your website/company name and your name on your report.
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