London Property Market Could Value Outdoor Spaces Separately

The property market in London might soon see changes to how homes are valued. Two top property consultancies are proposing a new pricing strategy that values outdoor space separately, similar to the method used in Dubai. This change could better show the true value of properties with large gardens, terraces, and balconies, meeting the increasing demand from wealthy international buyers.

Why Is Outdoor Space So Important to Buyers?

The demand for outdoor spaces has increased, especially among wealthy buyers who prioritise large, private outdoor areas. In Dubai, these outdoor areas are valued at 50% of the average internal value for the equivalent square footage. This transparent valuation ensures that properties with significant outdoor areas are accurately priced.

In London, the current approach is more generalised. Although outdoor space may make a property more appealing, it doesn't add a distinct amount to the property's price tag. A property advisor notes that estate agents undervalue outside space when determining a property's price in London.

How Could This New Valuation Strategy Impact London's Property Market?

If London were to use Dubai's approach, property prices could go up a lot. For instance, think about a duplex penthouse near the Lord's Cricket Ground in North London. Each one has at least 850 square feet of private terracing and roof gardens. Under the new way of deciding how much these properties are worth, this outdoor area could add up to £1.48 million to the price for each penthouse.

This pricing change would not just show how valuable these properties are but also meet the needs of wealthy buyers who see a lot of outdoor space as something that they must have. A property expert points out, "No matter the price, some extremely wealthy buyers just won't buy a property that doesn't have a lot of outside space; it's become a deal breaker."

Conclusion

The way outdoor spaces are valued might change in London. This could lead to more accurate pricing for properties with significant outdoor areas. It could also attract more international buyers and increase property values overall. As London continues to attract global investors, having a clear and specific valuation method for outdoor spaces could help the city remain competitive in the luxury property market.