If you have read any of the other Bricks&Logic Blog posts you will notice that we like to talk about how areas and districts of London act very differently to the London average. Well, the micro level detail does not stop there. We are also able to determine how a particular type of house may act differently to another even if it's on the same street.
Learning from your mistakes
When developing the Bricks&Logic index, we noticed that using average price changes for an area to forecast individual property prices consistently produced errors for certain types of properties.
For example, particularly expensive houses (>£2m) seemed to have changed a lot less in value than a small flat in the same area - even if they were on the same road!
Why might properties in the same area perform differently?
There may be many reasons for these differences, but most likely simple economics, supply and demand play a crucial role. We experienced several key events over the last decade which have most likely influenced this
- In April 2013, the Government introduced the ‘Help to Buy’ scheme to help first time buyers get on the property ladder. This increased demand and helped support the price of smaller, less expensive starter homes.
- In April 2016, Stamp Duty on properties over £937,000 was increased and a 3% levy on second homes introduced, both decreasing demand for more expensive homes.
- Uncertainty resulting from the June 2016 Brexit referendum reduced demand for properties at the higher end of the market, putting further pressure on prices.
Creating a unique estimate for every property
Our latest models can understand these crucial differences across property types and adjust their estimates accordingly
|Address||Jan 2012 Estimate||Jan 2018 Estimate||Change|
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