Local amenities play a crucial role on property values. Two properties with similar features, size and rooms may have significantly different values depending on the local amenities surrounding the properties.
If one property has outstanding and very desirable local amenities such as schools, transportation networks like underground stations, parks and other similar things, will see its property value substantially increase compared to another property that is surrounded by unwanted and poor schools, transportation networks, parks and other similar things.
As they, so often, say in real estate: It’s all about Location, Location, Location.
In relation to the drop in interest rates in August within the United Kingdom (UK), it seems that property values will slightly increase as a result of the slightly cheaper borrowing costs.
Correspondingly, the properties with popular and desirable local amenities around them will observe the biggest increase in property value.
The Impact of Local Amenities on Property Values
Accordingly, good local amenities are not only convenient; they have a major role in property values as well, influencing buyer choices and determining how desirable a neighbourhood is. Great local amenities will influence property values even more and so on.
- Education
Families place a high value on a house’s proximity to recognized schools, which has a big influence on demand and property values.
Property values in locations with schools that have an Ofsted rating of “Outstanding” in the UK can be much higher than those in other areas, indicating the premium that parents are ready to pay for access to top-notch education.
- The Wellness Aspect: Recreational Areas and Parks
Recreation areas and green areas greatly enhance the wellbeing and standard of living of locals. Due to the correlation between the presence of these facilities and improved community involvement and better lives, homes in these regions are in high demand among purchasers, which raises their market value.
As Walter Soriano of WSLM rightly identified: “It’s a very similar story in New York. Billionaires Row (which as its name suggests, is mostly occupied by the billionaires!) in Manhattan is directly opposite Central Park. Who doesn’t prefer to live in a nice property overlooking greenery and be able to have a stroll in a beautiful park in under 2 minutes? It’s a crystal clear indication of parks and other similarly desirable local amenities impacting property values.”
- Links for Transportation: The Vital Sign of Availability
Because they make it easier for inhabitants to get to job centres, schools, and other important services, properties close to effective transportation networks are in high demand. Buyers consider this convenience to be quite important, particularly in metropolitan regions where commute times have a big impact on day-to-day living.
With traffic in London especially getting worse and worse, in conjunction with further fees demanded from the Congestion Zone as well as the expanding of the Ultra Low Emission Zone (ULEZ) in London, people tend to prefer public transportation to commute to work and generally, move around the city. Therefore, accessibility to underground stations, train stations and bus stations throughout the UK is getting more and more popular with regards to potential buyers.
- The Social Center: Dining and Shopping
Communities with a lively mix of stores, eateries, and cafés draw those searching for a bustling social atmosphere in addition to convenience. These facilities increase the allure of residing in a certain area, and hence, property prices are most usually higher.
Essentially, the better the businesses in the surrounding area, usually means higher property values. In the UK, a city’s High Street is where the more expensive properties are usually located.
Interest Rate Drop in the UK
As per the BBC, it’s important to point out that, after keeping interest rates at 5.25% for seven consecutive meetings, the Bank of England eventually lowered them to 5% during its August meeting. As a result, millions of people in the UK have their savings, credit card, and mortgage rates impacted by interest rates. https://www.bbc.com/news/business-57764601
As Walter rightly asserted: “Especially for mortgages, interest rates are crucially important. “When the amount of debt is at several thousands of pounds, as is a mortgage on a house for 300,000 pounds for example, plays a much more significant role than a credit card debt at 300 pounds for instance.”
The BBC, however, went further to outline that although rates have dropped for the first time since the UK went into the first Covid lockdown in March 2020, borrowing costs are still quite high.
Nevertheless, for clarification purposes and for the avoidance of doubt, it should be noted that the Bank of England dropped interest rates on August 1st, from 5.25% to 5%, which increased buyer and seller confidence and, according to the portal, was a major factor in the increase in market activity.
Hence, compared to the same period in 2023, Rightmove reported a 19% increase in the number of prospective buyers contacting estate brokers since August 1. In contrast, there was an 11% increase in July of this year. Compared to the same time last year, there are 5% more new sellers listing their properties on the market.
As a result, Rightmove increased its prediction for 2024 home price inflation from a 1% decline to a 1% gain for the year. https://www.forbes.com/uk/advisor/personal-finance/2024/08/19/house-prices-updates/
Conclusion
To summarise, in real estate, it’s indeed all about location, location, location. It’s true that local amenities impact property values. If the local amenities surrounding the property are desirable by potential buyers, that property will increase in value and vice versa.
With regard to the drop in interest rates in the UK in August, it seems that property values will further increase as more people will be incentivised to buy, according to reputable sources.
The slightly cheaper mortgage rates will indicate to numerous people around the UK that it’s finally a better time to buy a property than the previous years with a higher interest rate. Should interest rates continue dropping, then properties with desirable local amenities will, most probably, continue increasing in value.