It’s better to value homes by floor space than the number of rooms, says Paula Hawkins
IN A NATION as obsessed with house prices as our own, there can be few homeowners who do not have at least a vague idea of what their property is worth. If asked to put a value on our homes per square foot, however, many of us would not have a clue. But pricing per square foot or per square metre is the standard in most other markets, and as more foreign buyers come to the UK it is becoming more common to think about property values in terms of floor space rather than the number of rooms.
“When you buy a property at the top end of the market say a flat in Sloane Square you will usually see the size of the property quoted in square feet,” says Joe Martin, of the Royal Institution of Chartered Surveyors (RICS). But what you do not see is the price per square foot. “It has always bemused me: why we do not value property per square foot the way that everyone else does,” Martin says. “We have this fixation with the number of bedrooms, which I believe has had an adverse effect on the property market. It has led to us building smaller houses with lots of small rooms.”
Moreover, rooms in private homes are the smallest of all. “It is one of the quirks of history that social housing is generally bigger than private housing, because there are minimum standards for the size of rooms in social housing,” Martin says. The Parker Morris Standards, which were introduced for all council housing in 1969, state that there should be at least 33 sq m for the first occupant of a house, and an average 13 sq m for each additional person.
No such standards apply to private housing, however, which has meant that the rooms in our houses have been getting smaller and more numerous. According to RICS data, a typical house built today is 55 per cent smaller than one built before 1920. House size has not changed a great deal since the 1980s, but the number of rooms we squeeze into our homes is rising, due to the popularity of en suite bathrooms, utility rooms and home offices.
When you do take a look at the price of property per square foot, it becomes clear just how expensive UK housing is. The estate agent CBRE Hamptons International has found that, per square foot, Central London is the most expensive place in the world to buy a home. The CBRE Hamptons report shows that prime residential property in London costs about £1,200 a square foot, 20 per cent higher than the cost of property in New York. For “super-prime” properties, prices range from about £2,000 a square foot to a staggering £3,000 a square foot at the very top; this was the actual price achieved for an apartment sold recently in Chelsea Square.
Pricing per square foot allows international buyers a clear view of what they can get for their money. For example, while London’s average price is £1,200 and New York’s is £1,000, Tokyo property costs £900, Hong Kong £700 and Dubai property just Â£200 a square foot.
Maximum super-prime prices are, of course, much higher, with only Monte Carlo, at £2,800 a square foot, coming close to London prices.
There is obviously more to purchasing a property than price per square foot. Andrew Jones, a partner at the estate agent Knight Frank, says: “People want very different things from different cities. Each international centre has its own attributes, so a straight price per square foot comparison may not be that helpful.”
However, while there are plenty of other factors to consider when looking at properties to purchase, this should at least be one. Since most estate agents will now put the area of a property in square feet on the floor plan when marketing a home, you can do your own calculations to find whether you are getting good value. A higher overall price may be worth paying: for example, take two three-bedroom properties in London SW4 (Clapham). The smaller flat, which costs £275,000, has a total area of 649 sq ft, while the larger three-bedroom home near by costs £375,000 but has a total area of 1,082 sq ft. Measured in terms of space, the larger property is cheaper, costing £346 a square foot, while the smaller property costs £423 a square foot.
JOIN THE WORLD OF SPACE INVADERS
COMPARISONS may well be odious, but there’s no doubt that the world of property is increasingly obsessed with them. Everything that takes off in America comes to the UK eventually think super-size fridges and pre-nuptial agreements so we had better get used to square foot comparisons when we buy our homes.
Prices being quoted per square foot really started with new-build blocks of flats, but in a burgeoning property market this trend has now spread to homes of all kinds. The South East, as you might expect, has the highest values, with residential property in Central London the clear leader at £1,200 per square foot.
Guildford, voted one of the best places to live in Britain in a recent Channel 4 programme, is a far more affordable £249. Cambridge, boosted by an affluent educated elite and wealthy silicon-valley market, comes in close behind at £240, while Brighton, bolstered by its Soho-by-Sea reputation and its celebrity residents, follows closely with prices of £232 per square foot.
Rather surprisingly, homes in Lincoln are fetching an average £190 per square foot, ahead of Birmingham at £152, where smart flats in the old jewellery quarter have proved popular with young and well-off singletons. York probably counts as something of a bargain at £182, as does Bristol at £164 and Leeds at £147.
Bottom of the league, but top of the table for bargains, is Manchester, where prices are a very manageable £137 per square foot.