Your home may be your most valuable asset, but a third of homes sell for less than their asking price, according to new research. What factors may drag down the value of your home?
Some 32% of properties on the market at the moment have been marked down, research from Zoopla shows. And, on average, these home are reduced by 8.4% – or around £25,000.
The value of your home can be affected by broad economic trends, as well as factors specific to your property. We explain 18 major factors that can drag down the value of your home.
Issues with your property…
1. Japanese knotweed
A seemingly harmless plant, Japanese knotweed can severely impact on the value of your home – and may even make it un-mortgageable.
The plant’s root system is up to two to three metres deep and wide, with the strength to burrow into foundations, wall cavities and underground structures.
If you see any sign of Japanese knotweed on your property, take steps immediately – you may struggle to sell your home, and may even face a fine under the Anti-social Behaviour, Crime and Policing Act 2014 if you fail to take action.
2. Structural or water damage
When you live in a property, you may not notice cracks in the foundation or the occasional damp patch, but buyers and surveyors will be keeping an eagle eye out for any type of fault.
Make sure any potential structural issues are addressed, or factored into your expected house price.
Keep in mind the estate agent will also be required to disclose fair information to homebuyers, which includes any ‘material information’ about the property.
3. Unfashionable furnishings
The shag carpet and orange wallpaper you put in when you bought your home may have been the height of fashion.
But buyers today may be turned off by out-of-date furnishings. The same goes for tired paintwork or scuffed floorboards.
A lick of paint in a neutral colour could boost your property’s resale value without costing too much.
4. Street appeal
Buyers will form their first impression of your home before they step inside, so make sure it’s a good one.
Cleaning up an unruly garden or fixing up peeling paintwork could boost the appeal to buyers.
5. Bad neighbours
You may have the nicest house on the street, but it may not help if your neighbours are putting off potential buyers.
If other houses in the street are run-down, or have untamed front lawns, buyers may be unwilling to pay a premium to move in next door.
Issues within the local area…
6. Changing local demographics
The types of buyers interested in a neighbourhood will have a significant impact on which types of homes are in highest demand.
If, for example, your area attracts primarily couples with children, you may struggle to achieve top price for a one-bedroom flat.
Dynamics can change over time, so it’s worth keeping an eye on the types of homes achieving high sales prices in your area.
7. Housing surplus
An influx of a specific type of property in a local area can drive down the price for everyone.
If a large block of apartments goes up for sale, all apartment owners suddenly face stiff competition, and may have to drop their prices to compete.
8. Closure of nearby employers or facilities
Some local amenities make areas particularly attractive, such as convenient shopping centres or hospitals.
If these facilities close up or become less appealing, you may see your home value fall.
9. Low school ratings
Many parents of school-aged children will pay a premium to live in the catchment area for a school rated as ‘excellent’.
By contrast, if a school loses its rating or suffers a scandal that decreases its popularity, local homeowners may lose this advantage.
10. Local job market shrinking
Especially in rural locations, the local job market may depend on a handful of employers.
If one of these employers shuts down, or the local economy slows, less people may be interested in moving to the area, meaning lower demand for properties.
11. Environment pollution
Most people value clean air and a safe environment for their home.
But many factors can impact on the quality of the local environment, including heavy industry, waste disposal and traffic levels.
The opening of a new waste disposal plant around the corner, for example, could severely detract from your home value.
12. Powerlines or mobile phone towers
Many people avoid living near power lines or mobile phone towers, especially if they’re visible from your property.
If the council decides to build a set of powerlines near your property boundary, you might find some buyers are deterred.
13. Blocked view
Looking out over the sea, rolling hills or a cityscape can be a huge drawcard for buyers. So if your home loses that view, you may see your property value plummet.
If a new development is proposed that is likely to affect your view, you may be able to put your case to the local council before permission is granted.
But your view may also be affected by neighbours, for example, if they decide to build an extension or plant a stand of trees.
14. Noise pollution
Most people want to enjoy their home in peace and quiet.
If a major motorway is built near your property, or a railway line is routed nearby, you may suffer from increased noise – and that may bring down your potential asking price.
15. Increased traffic
Savvy buyers will scope out the traffic near your home to check how troublesome their commute is likely to be.
Changes to local traffic flows – if a road is closed or a rerouted, for example – could drive up the number of blockages in your area, and decrease your home’s appeal.
16. New regulations
Government regulations will have an impact across the UK, and some can lead to decreased activity in the property market.
As an example, the stamp duty surcharge of 3% led to a decrease in the number of buy-to-let mortgage applications.
By contrast, a cut to stamp duty for first-time buyers was designed to encourage this group to enter the market.
17. Base rate rise
The base rate, which is set by the Bank of England, will affect mortgage rates offered by banks.
If the base rate rises, interest rates also tend to rise – meaning buyers must spend more to pay off their mortgage, and may seek out cheaper properties.
When the last base rate rise kicked in, new Which? research reveals how quick banks were to jack up rates for borrowers. Find out more in our story.
18. Economic downturn
Buyers need to be able to afford the repayments on their mortgage.
When incomes fall, or unemployment rises, there may be less buyers in the market and those that are looking may have less to spend.