How to Assess the True Value of Your Home in the UK

4 Crucial Factors that Will Help You Estimate Your Home’s Worth

How much is my home worth? This is the first question we ask ourselves when we think of selling a home. This may seem easy enough, but the truth is, there is no defined way to estimate the correct figure. There are numerous factors, such as property size, condition, location and proximity that directly or indirectly affect the value of your property. If you know how to calculate proper home value, you can buy or sell your home at a fair price. It can also provide a clear picture of your overall financial condition.

What is a Property Valuation?

In simple words, a property valuation is a process of understanding the true worth of a property at the time of valuation. This is crucial for both buyers and sellers because if you are looking to sell your home, then a valuation will help you get an idea about a good asking price before you put it on sale, so you don’t end up getting lesser price than actual. Similarly, if you are looking to buy a home, a property valuation will help you find out a fair price to buy the property, so you don’t end up paying more.

The valuation will provide you with an estimate of the budget you need to buy a new home. In addition, you can also apply for a bridging loan to complete a dream home purchase if you are aware of your existing home’s worth. When you conduct property valuation, make sure you obtain several valuations from multiple real estate agents. This will enable you to understand an average market value of your property as close to accurate as possible.

Before you plan to sell or buy your residential property, here is everything you need to know to assess your property’s worth.

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1. Location of the home

Location is the key contributing factor that affects the price of your home. You can change your house infrastructure, its size and interior, but you cannot change the location. The location creates desirability, desirability generates demand and the demand develops real estate. Properties located around commercial markets, schools, shops, restaurants and transportation hold a higher value than their counterparts. These factors command steeper prices than others that are a few miles away.

On the contrary, properties that are near manufacturing units where there is a loud noise pollution or where there is a risk of environmental damage, such as the flood, the value may drop down significantly. Thus, when it comes to assessing the property’s worth, location can have a greater impact than the condition and the size of the property.

2. Size of the property and number of rooms

Size is another important factor to consider while calculating the property’s market value. The bigger the property, the higher value it holds. Usually, the value of the home is calculated on price per square foot. This price per square foot can vary greatly depending on where you are buying. For instance, a 1,500 square foot home with appealing neighbourhood may cost more than a 2,000 square foot home in a remote location. But, if you compare prices of two similar homes in the same location, the big one holds more value than the smaller one.

Moreover, the accessible space in the home matters as well when estimating its value. In the UK, the pricing is often influenced by the number of bedrooms and bathrooms in the home. For example, the price of a 5-bed home may be valued more than a 3-bed room even if it has more space. Unfinished basements and garages are not usually counted in the usable space, but they may contribute in increasing your property’s value.

3. Age and condition of the property

The age and condition of the property directly affect the property value. If the property is new, it holds a higher value since it would not require any renovation or repairs. Moreover, the critical parts of the house, such as electrical, plumbing, roof and ceiling are new, which means they are less likely to break down. This brings savings in the long run.

In addition, the condition of the property is also an important consideration. People would rather buy a 20-year old home that is well maintained than a 5-year old home that requires major renovation. Most buyers are inclined to pay a little more for a move-in ready home.

4. Find out how much similar homes have sold for recently

To get a firm idea about the property’s value based on its age, condition and location, it’s now time to find out how the property market is performing in your area. Inquire about similar properties that have recently sold in your area, ideally within the past few months. The property market fluctuates inadvertently, so the newer comparable property sale, the more exact idea of the current prices you can get.

You can also consult a professional real estate agent for a comparative market analysis. Compare the property in terms of the type of home, year of establishment, number of rooms and bathrooms, size and location. They may provide all this information at no or little cost, so you can get a rough idea of what your property’s worth look like.

Why estimating your home’s value is important?

Before you plan on buying or selling your home, it is crucial to understand the worth of your property. A property valuation will help you understand whether a listing is priced appropriately, what you can afford and how to price your own home. This makes easier to avoid common mistakes when you are aware of the factors that affect your home’s worth. And, determining your home’s value doesn’t end with sale or purchase. Bridging finance, refinances, insurance premiums and home equity lines of credit are all dependent on home value. Determining your home’s worth means better insight and control over these processes.

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