With several years behind us in the estate agency business in the United Kingdom, John Bryant and his team have set up this blog for landlords looking to rent out a property, or sell one. Bryant Lettings are an established online agency, with a vast amount of information to offer our customers. Our key focus is on valuation, and getting this right in the first instance. For a guide on how we work, please read below:-
Get to Know the Principles of Property Valuation
It is not uncommon to find properties that are identical and are located in different locations having a different price tag. To understand why this is the case, you need to first understand the principles of property valuation.
Property valuation is a central step when buying or selling property as it is the gateway to understanding the market value of your property. It is basically the practice of enhancing an opinion on your property’s going value. While prices of property will vary owing various factors such as the location, it is possible to determine how much your property is worth by taking various factors into consideration. Consequently, valuation experts must be certified to undertake the task.
- Assurance – This is simply the need to have reasonable compatibility and similarity within a defined location. That is, valuers will try to establish if the compatible land uses are able to generate income in comparison to the limitations that are on the property owing to the shortcomings of the location.
- Anticipation – This is majorly based on the advantages that the property is likely to enjoy in future. That is, the value that the property will attract in relation to probable stream of income that it will generate. Thus, will the buyer be able to access the value that will be generated in the future as opposed to the current market value?
- Most extensively used – This is where there is an increased demand on the property that is used extensively. This usually has an effect on the price/value of property as there will always be a willing buyer at any given time. While still on the most extensively used, the purposes that the property is supposed to fulfill are also taken into consideration when determining the value.
- Supply and demand – This is a principle of economics that applies in just about every area of life. It often forms the basis of valuation. That is, if your property is located in a busy or important locality then its value would be great compared to property that is in areas with less demand.
- Contribution – If the value added to property is able to compensate for this contribution then it is highly likely that the value of the property will increase.
Overall, the basic principles discussed above are vital when coming up with accurate estimations of the value of property. This is because property valuation is a systematic scientific process hence, the property valuer’s decision is governed by some logic. This is then coupled with other factors that are also deemed vital such as the age of the property, the location, size, structural improvements and the availability of storage space among other things.