It’s the holy grail of property buying – bagging a bargain and then watching the value of the area and your home go up. So how do we do it?
Many people can’t afford to live in their first choice area, so a compromise is needed – but this can be a blessing in disguise. If the affordable location then improves, along with their home’s value, it’s a win-win situation.
What I tend to find is that when one desirable area becomes too expensive, people head to adjoining neighbourhoods. You can still shop and socialise in the trendy hot-spots, but your cost of living isn’t huge. As more people follow suit, local infrastructure improves and house prices, hopefully, go up.
Ahead of the trend
The good news is you don’t need a crystal ball to predict the next emerging property hotspot, just an eye for detail and a willingness to do some research. But it can still be a risky business, and there are no guarantees.
People often talk about ‘the Waitrose effect’ and statistics suggest that living near to a high-end supermarket can add up to £40,000 to your property’s value, according to research by Lloyds Bank. Other signs of growth are newly-opened estate agents, trendy cafés and independent boutiques – but be warned; by the time these have arrived, in my experience, property prices are usually already high.
The best of both worlds
You are probably unlikely to be out shopping and dining every day, so even if the better areas are a taxi ride away, it’s still a cheaper way of living than over-stretching to buy in an expensive area.
Improving schools, better transport links and investment from large companies all add to an area’s desirability, but think long-term as well – check out the council’s Local Plan and look for areas earmarked for regeneration or new housing.
Pros and cons
If you do purchase in an emerging market, you should see some good capital growth and enjoy living in a great area with lots of facilities. But be careful not to be ‘sold’ to, too well. Some areas tipped for growth don’t develop as expected, so it’s not a sure-fire way to make money. Always go for a property and area you are happy with as it is now and see any developments as a bonus.
Finally, be prepared for some downsides of living in a growth area, including an increase in traffic and cheaper shops making way for more expensive stores. Additionally, as people in the South West have seen, you could end up living in a haven for second homeowners, which drives up prices and could mean your children end up being priced out, forcing them to fly the nest.
Kate Faulkner is one of the UK’s leading property experts. Read her regular column every month in Period Ideas! Get in touch with her via propertychecklists.co.uk or follow her @katefaulkner
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