Return on investment - price per sqm?

[puntloos]

This site: https://houseprices.anna.ps/ - is quite interesting - listing the average house price per sqm. 

 

My question: how do you determine a reasonable maximum to "total house value" based on this? Surely (ignoring creating a flat).. how many basements and loft layers can you add to a house before nobody wants to pay the theoretical extra price... 

 

A 10x10, 3-floor house = 300sqm, on a 300sqm plot seems reasonableish, but my gut feel is going over that size will stop adding to the potential sale price.

 

[ProDave]

I don't trust that data.

 

Using that map, and the figure for South Oxfordshire OX10, it suggests my 150 square metre detached house would be worth £513K if I picked it up and moved it there.

 

There is no way you could buy the house we have up here, in south Oxfordshire for £513K.

 

The cheapest area I could find was £890 per square metre.  So it would be "worth" £133K  That is less than the build cost, so even if you were given a plot for free it would cost you more to build it than it was then worth.

 

 

[saveasteading]

This is simply price divided by m2, and for large, mixed areas, so will be very approximate.

 

Also I would think it would be slightly too cheap, because bigger does not equate to better.

 

To deal with your query of extensions and their value.

 

I would say that a house extension has to be absolutely appropriate or it will be worth less than the cost.

In a terrace of £200k houses, a small extension and loft conversion  may just get the cost back when sold, but anything big or eccentric will cause a loss, because there is a 'right' value for that location. If you want bigger you look somewhere else.

 

And extensions are expensive £/m2

 

People extend because they don't want to move, and they pay for the convenience (and saving)  of not moving.

 

An eccentric, overextended property may even be worth less than the standard ones around it. cheaper cost divided by bigger area

 

The same will apply to quality. You won't get the money back on a very fancy kitchen.

So a wreck in need of conversion will keep the cost/m2 down, and a 'tired'  conservatory is worth nothing (or less) ,  while a fancy refit will not push the price up much.

 

Or am I wrong?

is there one for Scotland?

[Bitpipe]

1 hour ago, puntloos said:

This site: https://houseprices.anna.ps/ - is quite interesting - listing the average house price per sqm. 

 

My question: how do you determine a reasonable maximum to "total house value" based on this? Surely (ignoring creating a flat).. how many basements and loft layers can you add to a house before nobody wants to pay the theoretical extra price... 

 

A 10x10, 3-floor house = 300sqm, on a 300sqm plot seems reasonableish, but my gut feel is going over that size will stop adding to the potential sale price.

 

 

All depends on the street ceiling values. If other properties in your immediate area are going for similar then you should be ok - if yours is significantly more expensive than others then it may struggle to sell.

 

If the house is well proportioned, designed and sits comfortably on its plot then you're probably OK. 

 

I remember some new build million plus 6 beds around us about 10 years ago that had postage stamp gardens and as a result took ages to sell.

 

[Oz07]

That website is out by probably 100% in my area atm. What are others seeing?

[Bitpipe]

3 minutes ago, Oz07 said:

That website is out by probably 100% in my area atm. What are others seeing?

 

It's not a million miles away for my area but I suspect our street could be about 20-30% more than what is shown for the area as a whole.

[Oz07]

homesearch.co.uk isn't a bad tool for research. I'm a bit dubious of these free websites though. What info are they selling to the agents? I do also wonder if agents have access to your list of saved properties on rightmove app if you make enquiry?

[LSB]

we have 6 acres and no neighbours so it is way down on our house for both those reasons

All the houses on the road I live are are very old, character, individual large houses with large or very large gardens / fields, but that site only reckons about 500k for them when they sale, if ever on the market for a huge amount more.

 

[Ferdinand]

You need to take it with a pinch of salt, and look for comparables (area type, size, quality) in your area. Then price per sqm has value.

 

Price per sqm relies on gardens not making much difference.

 

In my spot I am seeing some bizarre-looking prices. Either there is a fundamental transformation going on, or a temporary mini-bubble, or some people are deranged, or a disorderly market. It feels like a general uplift by 15%, which may go back a bit when the insane Stamp Duty holiday finishes.

 

At the moment there is in my road a 3 bed 3 bath newbuild done 3 years ago on a 330sqm corner plot - single garage, 1300 sqft. Detached. Downstairs is a 20x24 kitchen living diner, 5x11 utility, 10x10 office and a shower room. Upstairs is 3 double bedrooms, one ensuite and a separate bathroom. Decent quality but not outstanding - electric gates, 2m wall not fences,  garage, but charcoal frame 2g with trickle vents and no MVHR. That is on at £365k, or £280 per sqft. EPC83. Jammy bugger got the site for £30k in 2014  with a 1 bed railway carriage end terrace house on it, advertised at £60k. And I didn't know. He knows what he is doing.

Across the road, an extended Edwardian flat fronted semi. Also 3 bed (2 double, one single) 1290 sqft. Upstairs bath only. Reasonably extended though obvs not new. Big kitchen/family room extension on the back/ Bigger, better imo trad garden but not as designed. Renovated. Stuck on at £215k for 3 months. EPC 65. That is £166 per sqft.

 

I paid £130 per sqft in 2013 for mine, which is detached 2000sqft and a bungalow rebuilt from 3 walls and the ground to modern standards - as good or better as the newbuild above but my windows are brown upvc and it is not shiny. I would value mine at about 190 per sqft.

 

But I may be wrong ? .

 

Your site puts us all at £120 per sqft.

 

I am not sure how she incorporates her "based on prices from 2007 to 2018" claim. I don't even understand what that even means, as there is no time progression in the map.

 

Aha I see. It is an average of all sales between 2007 and 2018, using floor area data from all the EPC reports. So at best it is a guestimate for about 2013, which may explain a lot.

 

 

Quote

Methodology: Sale prices taken from Land Registry's Price Paid dataset of residential property sales to individuals since August 2007. Floor area in m² per property taken from Energy Performance Certificates. I join each property sale to the property's most recent EPC, using normalised addresses: this finds a match 79% of the time, for around 6.2 million property sales. The aggregate price per m² for each postcode district is then calculated as the total price of all sales, divided by the total floor area of all properties. The occasional black hole is a postcode district with no matching residential transactions, e.g. Heathrow and parts of the City of London. Last updated January 2018.

 

 

So in short you need to add the general market uplift in your area 2013 to 2021 then you may get something perhaps within +/- 20%.

 

 

[Oz07]

Single storey always gets an uplift on equivilant house, I reckon 20%. My last place got 300 per sq ft, bungalow. I think markets moved on at least 10% since last August. 

 

Have you been living in a cupboard @Ferdinand it is a mini boom atm. 

[Ferdinand]

13 minutes ago, Oz07 said:

Single storey always gets an uplift on equivilant house, I reckon 20%. My last place got 300 per sq ft, bungalow. I think markets moved on at least 10% since last August. 

 

Have you been living in a cupboard @Ferdinand it is a mini boom atm. 

 

It is different by area, and may well fall back a little.

 

The actual price changes seem not to have been much more than the *average* for every year of the whole noughties, which was 8.2% per year nationally.

 

I'll give you "mini boom". Talking to an Estate Agent today, and we agreed that this is perhaps only the third good year here since 2010.

 

But OTOH we need stable house prices into the future, so Rishi *must* start to kill some of the tax subsidies.. 

 

  

[Oz07]

I'm not that far from you. Leics

[Ferdinand]

2 minutes ago, Oz07 said:

I'm not that far from you. Leics

 

Perhaps a different character of area?

 

We are totally ex-mining, but I think green improvements may be starting to be recognised - and plenty of new housing has been built over the last 15 years, which must help. Here we have hundreds of acres of country parks nearly right round the town now.

 

 

[Ferdinand]

1 hour ago, Oz07 said:

Single storey always gets an uplift on equivilant house, I reckon 20%. My last place got 300 per sq ft, bungalow. I think markets moved on at least 10% since last August. 

 

Have you been living in a cupboard @Ferdinand it is a mini boom atm. 

 

Small 3 double bed 1970 semi-detached bungalow I am selling has been valued at £255 per sqft. Renovated to newbuild standard in 2017. Worse area than where I am but the nicest part of that, and a lovely place to live if you want a quiet life. 

Certainly now is a time to sell not buy without a good reason.

 

[Dave Jones]

On 28/07/2021 at 18:36, Oz07 said:

That website is out by probably 100% in my area atm. What are others seeing?

 

ditto if not 150% too low.