By Peter Young, Managing Director, John D Wood & Co.
There has been a shift towards property purchasers comparing the asking price of a property on a £ per square foot basis rather than on the number of bedrooms. Whilst this is a sensible way to compare the value of properties across a number of areas at the start of your search, it really shouldn't be used as a tool in deciding what price to offer. Why?
As when it comes to valuing a property experienced agents look at comparable properties which have been sold, together with the other ingredients of a valuation such as location and position, aspect, architectural style and features, condition, facilities and scarcity.
We recently sold a penthouse flat for £400 per sq ft more than it was "worth" when valued only on a price per square foot basis. The main reason for this was the fact it has a 1,000 sq ft roof terrace which, like all outside space, it not taken into account when calculating value on a price per square foot basis. Additionally this property was unmodernised and offered outstanding scope as a redevelopment project. After 52 viewings, and fierce bidding, the successful purchaser was prepared to pay an extra £1m for the spectacular roof garden, the penthouse position and the ability to add value through refurbishment.