How can you tell if an area is up and coming or down and out?
If you're considering buying a home in a new area there are a few tell-tale signs that reveal how buoyant the neighbourhood is. These might help you predict if house prices are set to go up.
1. Look out for cranes and skips
An increase in building and construction work is often a sign that an area is improving, says Tom Bill, Head of London Residential Research at Knight Frank.
"If there’s a general sense of rejuvenation and investment in a neighbourhood, it’s typically a positive a signal for house prices."
Residential building works, such as extensions or basements, are a very positive sign. If there are a few happening in the same area it shows that locals are happy and willing to invest in staying there.
2. Go shopping
When trendy restaurants and independent coffee shops pop up, it’s a strong indication of demand in the area from people with a higher level of disposable income. This means house prices are likely to go up.
Retailers research locations extensively before opening, so as soon as a new coffee shop or branch of Waitrose appears, make your move. Prices are likely to skyrocket over the following few years.
“Plantation shutters are one of many things you can watch for, especially in London When you see the first pairs start to appear on a street, that could be a buy signal,” says Tom.
You need to strike a balance, however, as an area saturated with trendy outlets may mean you’re too late and the growth potential has already been exhausted.
3. Get chatting
There’s no better way to get a feel for a neighbourhood than to talk to the people who live there.
Homeowner and property developer Sara Mansfield, says, "Before we decided to buy our place in Brislington, just outside Bristol, I spent a lot of time in cafes and shops chatting to locals.
“We also knew parents at the local school, so they gave us a real insight into the area. It helped us make our decision to buy, and we’re really pleased we did."
Of course, you’ll need to talk to several people to get a good idea of which direction the neighbourhood is heading. If there are lots of folk who have just moved there, it might tell you something about the growth of that area as well.
4. Get on the bus
Transport and infrastructure are key things to look at when you’re considering an area.
If roads, rail networks and bus services are being improved it’s a good sign.
“Shorter commute times, well-rated schools and green spaces are other factors that will also drive demand,” says Tom.
5. Follow the hipsters
Places with a high population of younger people in their 20s and 30s will inevitably experience house price growth in a relatively short space of time.
“Younger people can be priced out of established neighbourhoods, so often lead the way in the resurgence of more overlooked locations,” says Tom.
“In recent years, for example, we’ve seen a trend for younger people moving out of London to coastal locations in the south and to cities such as Bristol, driven primarily by affordability.”
6. Count the days
“The number of days that properties are on the market before going under offer can be a good indicator of demand in a particular area,” says Tom.
Look at listings of comparable homes for sale in the region you are interested in. If they’ve all been sitting on the market for more than 120 days, that’s probably not a good sign.
If properties seem to be snapped up within 10 days or less, it’s a pretty tell-tale sign of a hot property area.
7. Mind other people’s businesses
When businesses settle in an area they’ll have definitely done their research, weighed up demand vs. supply and transport possibilities. Basically they’ve done your homework for you.
Big projects like a new theatre, a multinational company or retail park will bring lots of jobs to an area. This in turn increases demand for housing in the area, meaning prices are likely to go up.
8. Go with the overflow
Don’t ignore properties that are on the periphery or one or two stations away from popular areas. Often, these are areas that could use a little love and attention so prices will be lower.
If a location is in close proximity to the amenities of the desired area, it’s only a matter of time before these neighbourhoods reach a similar level of desirability.