Another day, another survey. The press and TV love ‘em and that’s exactly why the Halifax, for example, produce them.
Having said that, some are a great deal more useful than others. For property investors, it’s often the case that the headlines the survey creates are NOT where the story is.
Take the second annual Halifax Quality of Life Survey.
It’s created headlines in most of the media today, citing Wokingham as being the best quality of life location in the UK .
Is that useful information to property investors?
In itself, probably no, not really.
Why?
Because the factors the survey measures – all of which seem valid – have already been identified as benefits by large numbers of people and they have already moved there and pushed up property prices.
Sustainable
Sure, we can take the view that these factors are all quite sustainable and therefore Wokingham will remain a very popular place to live, demand for housing will continue to be strong and prices will rise consistently over time.
But, when we look at the Halifax tables (see below) and compare them with existing property prices, we can actually identify locations where property prices are, it would appear, out of kilter with the quality of life ranking.
We could say then that these locations are worth looking at in terms of property investment because we’d expect prices to rise faster than elsewhere – and at the very least they should be expected to rise to the average.
The survey tracks where living standards are the highest in the UK by ranking local performance in key categories - including employment, earnings, housing quality, weather, carbon emissions, crime, education performance and health.
So, Wokingham ranks first and was third last year. It’s obviously doing something right.
But when you look at property prices in Wokingham we see that they carry a premium of 16% when compared to the rest of their region. Wokingham, then, it would seem, has been well and truly spotted!
Here’s the rest of the list:
Property price premium
So, if you’re convinced that the criteria used does indeed add up to a sensible ranking of where is most desirable place to live, then information about the property price premium becomes very interesting.
As we would expect - property prices tend to be higher in areas where the quality of life is better. These are places – if they are being measured correctly – where people have already discovered it’s good to live and so demand for property will drive up prices. That’s what we’d expect in a properly functioning market.
And, generally, that’s what we find.
House prices trade at a premium to the average in their region in 27 of 30 local authorities with the best quality of life.
On average, this premium is 30%. In Wokingham, the average house price is £328,282, that’s a premium of £45,372 or 16% to the average house price in the South East.
Twenty-two of the thirty LAs with the best quality of life are in the South East of England.
Negative premium
And when we look at the top 30 locations, we find just three places where property prices are trading at a negative premium:
Fareham ( - 16% or £46,582 below the average)
Bracknell Forest ( -9% or £26,093 below the average)
Aylesbury Vale ( -1% or £3,627 below the average)
In London, Bromley ranks in number one position, and the average house price is £321,886 – 12% or £41, 859 below the London average.
So, are these the hotspots of tomorrow!
What do you think?
Here's the first 30 in that table in order of rank.
- Wokingham
- South Bucks
- Chiltern
- Surrey Heath
- Hart
- Elmbridge
- Waverley
- Tandridge
- Wycombe
- West Berkshire
- South Cambridgeshire
- St Albans
- Rutland
- Mid Suffolk
- East Hertfordshire
- Mole Valley
- Uttlesford
- Vale of White Horse
- Horsham
- Guildford
- West Oxfordshire
- Mid Sussex
- Aylesbury Vale
- Blaby
- Winchester
- Windsor and Maidenhead
- Bracknell Forest
- Three Rivers
- Fareham
- Sevenoaks
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