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Property News > First time buyers perceive property values in London to be higher than they really are
First time buyers perceive property values in London to be higher than they really are
Granted, stepping onto the property ladder for the first time can be rather daunting. The current economic climate is tough and if you’re looking for a home in the capital then you can be forgiven for thinking you’ll have to shell out a small fortune, however, it has been found that first time buyers think homes in London are more expensive than they actually are. The majority of first time buyers in the capital overestimate house prices and in many locations, homes considered to be expensive are often cheaper than first thought.In total, 62% of people looking to buy their first property thought that homes were more expensive with those in boroughs such as Camden, Hammersmith & Fulham, Brent and Westminster thought to be the most costly. Barratt London surveyed some 2,000 first time buyers, all looking to buy a home in the London area. The survey required the 2,000 first buyers to estimate the prices of properties across 12 London boroughs with only the location and a description of the property to go by. In Westminster, 79% of people overvalued the cost of a first floor, two-bedroom apartment in Marylebone. The apartment was valued just shy of £850,000 whilst respondents estimated that it would be closer to the £955,000 – an overestimation of 12%.Elsewhere, in Brent, a further 66% overestimated the cost of a new build open plan apartment with two bedrooms in Stonebridge. Respondents estimated that such a property would cost an average of £418,496 whilst the property was listed at some 10% less at £379,950.The research was conducted in a bid to understand how first time buyers perceived the cost of homes across London and it was found that a large part of respondents falsely believes that house prices in London are far higher than they actually are. However, this comes little surprise given the circumstances surrounding the current property climate. Further to this, the research also revealed that many first-time buyers in the capital anticipate higher property values overall, irrespective of location.A total of 67% of respondents overvalued the price of a £750,000 split level maisonette in Camden, valuing the property at an average of £780,000, £30,000 higher than the asking price. Those who lived in the area estimated the property would cost even more, valuing it at an average of £814,000. In Hammersmith and Fulham, a two-bedroom ground floor flat listed at almost £800,000 was thought to be closer to the £825,000 mark by some 61% of respondents. Interestingly, those who lived in the borough estimated that the property would cost around £835,000.Across Lewisham, some 52% estimated that a two-bedroom Victorian top floor split level flat would cost almost £434,000 when in fact the value was £425,000. In contrast to those in Camden and Hammersmith and Fulham, those who lived in Lewisham underestimated that the value of the property by some 4%, valuing it at £407,000.