What contributes to the value of residential property? The list is endless and most elements, unfortunately, are extremely difficult to quantify and isolate. For example, proximity to green space and schools, ceiling heights and natural light all contribute in various ways. 

However, two quantifiable key attributes have a profound impact on what people are prepared to pay for their housing in London. They are proximity to central London employment hubs and quality of place. In a nutshell, areas with shorter travel times to well paid jobs and vibrant, well-served communities command higher house prices.

Connectivity and quality of place

Improving travel times is clearly difficult and mostly out of developers’ hands. However, improving the quality of place is very much within the control of those bringing forward development sites, and particularly those delivering large regeneration schemes where there is potential for significant transformation. 

But the potential for uplift isn’t the same across London. Locations closer to central London have higher potential values than those with longer travel times. And there is a clear step change for locations within half an hour. 

For instance, as the graph below shows, median values between 20-30 minutes of central London go from £765 per square foot in a location with a ‘poor’ quality of place to £1,177 per square foot, an increase of 54%, where the quality of place is ‘good’*. The same change in quality of place for locations between 50-60 minutes of London is just 16%, from £499 per square foot to £578 per square foot.

The million dollar question

So where are the areas with the greatest 'hidden value' and therefore the most potential for value uplift? The map below analyses 4,000+ micro locations across London. Areas in dark red have the greatest 'hidden value'. Here, current values are much lower than the average values seen in areas with similar characteristics of travel times and quality of place. These areas tend to be found in East and South East London. Areas in blue have values that are currently at or above those found in similar locations and therefore likely have less potential for value uplift.

The relationship between commuting times and quality of place across London shows a range in expected values and the art of the possible. Some locations will present greater opportunities for upside and the potential to close the gap.  Precedent schemes with exemplar placemaking have also proven what is possible.

What does good look like?

There are a number of traits and characteristics defining schemes that have transformed locations for the better. These are found in developments where placemaking is paramount and where quality of life is prioritised for residents.. This includes safe, secure and legible routes connecting through the site and the wider area; streetscaping prioritising pedestrians; an aspirational food and drink offering; health facilities, shops, pocket parks, meeting places and play areas. 

In short, value lies in a well-connected, well-served community.

Further information

Contact Paul Wellman