Greenwich's Property Market Enigma: Cracking the Code of Greenwich's £707/sq. ft Puzzle
Attention Greenwich homeowners and first-time buyers! Ever wondered what factors determine property values in Greenwich? Discover the untold secrets that will help you make informed decisions and find your perfect Greenwich home.
“Dear Estate Agent
My fiancé and I have been actively searching for our first home in Greenwich for the past month. Being first-time buyers, we are new to this process but have genuinely enjoyed attending viewings. Although we haven't come across our dream Greenwich home yet, we are staying practical and have identified three potential properties on which we are considering making an offer. While two of these properties require some attention, we believe they have great potential; we have also seen a brand-new home in Greenwich.
Interestingly, we have also noticed that some Greenwich properties we are looking at tend to linger on Rightmove and Zoopla for a significant period. We are unsure if this is a common occurrence or if there are specific reasons behind it (like they are too much money).
Given what the newspapers say about the current slower pace of the property market, we are wary of paying more than necessary. However, we are eager to purchase sooner rather than later, as we have grown tired of renting in Greenwich.
A friend of mine, who happens to be a chartered surveyor in Marylebone, suggested a straightforward method for valuing residential properties. He explained that it involves calculating the area's average cost per square foot and comparing it to the property.
Surprisingly, all three Greenwich properties on our shortlist have similar values, and the largest one offers the best price per square foot but is not in the most popular area. The new build property is a little smaller.
Is this a good approach to determining which property provides the best value for our money?
Thank you in advance for your assistance.”
My reply…
“Dear Greenwich First-time Buyer
Valuing a Greenwich Property by Square Footage: A Comprehensive Perspective.
In your search for the perfect Greenwich home, you say you have come across three Greenwich properties that have caught your attention. While you have yet to find the one that makes your heart skip a beat, it's important to remember that finding the perfect Greenwich home is quite rare.
Compromises are often necessary, but you can still find a property you'll fall in love with. It's worth noting that considering the price per square foot is typically a strategy employed by Greenwich investors, whether they are looking for buy-to-let opportunities or properties to develop and sell on.
While the square footage can be a helpful metric in helping you decide among the Greenwich properties on your shortlist, it's crucial not to let it overshadow your personal preference and attachment to a particular home.
I would advise that instead of waiting for your Greenwich dream home—a home that might never come on the market, you should focus on Greenwich properties that appeal to your practical and emotional needs.
For first-time buyers, the convenience and low maintenance offered by new builds can be enticing, yet on the other hand, buying a brand-new home comes at a premium (just like buying a car).
However, if you are willing to put in some effort, a property with potential might be an excellent choice for you. I suggest creating a shortlist of essential factors for your next home, such as which areas of Greenwich you do (and don’t) want to live in, property age, number of bedrooms, local amenities and desirable features like a southerly-facing patio and garden.
This list can help you determine the most practical option among the Greenwich properties you're considering. Once established, you can decide guided by your emotions and rational thinking. Striking a balance between the emotional and practical aspects is vital in making the right choice.
Also, consider the duration of your stay in your first Greenwich home. Most first-time buyers tend to move again within five to six years, so you must consider its future marketability.
Similarly, consider the quality of local primary schools if you plan to start a family, as this will have a massive effect on your child's education and the number of buyers you will attract when you sell.
Now, let's address whether valuing a property based on the price per square foot is reliable.
Determining a Greenwich property's value solely on a price-per-square-foot basis is overly simplistic. That technique probably works in Marylebone, where space is at a premium, yet this is Greenwich where the properties are a lot more diverse. Residential property cannot be commoditised in such a manner, as it involves a combination of science and art. If it were that straightforward, there would be an app on your phone that could instantly provide accurate property valuations and professionals like surveyors and property valuers would become obsolete.
A home's value encompasses intangible factors such as the feeling you get when you enter, the view from the kitchen window, and even the proximity to your in-laws. These unique qualities make a home more desirable and, therefore, more valuable.
Let me give some examples of £/sq. ft. in the Greenwich property market.
The average Greenwich home is worth £707/sq. ft.
Yet that is all it is, an average. As Tim O’Reilly, the man who coined the phrase ‘open source’ and ‘Web 2.0’, said, “Statistics are like bikinis. What they reveal is suggestive, but what they conceal is vital.”
You see, 8 in 10 properties currently for sale in Greenwich have a £/sq. ft of between £576/sq. ft to £909/sq. ft; that is a wide range.
But when we go to the extremes, the gap becomes a chasm. The most expensive property in Greenwich by square footage is a 2-bed apartment on Cutter Lane at £1,075/sq. ft, whilst the cheapest property in Greenwich by square footage is a 3-bed maisonette on Humber Road at £438/sq. ft.
Of course, price per square foot can indicate the value and prevent you from overpaying; it shouldn't be the sole determinant. Prices vary significantly on the same street due to location, layout, condition, site orientation, plot aspect, and garden size and local amenities. Therefore, it should be used as a guide rather than a definitive measure of value.
It's important to remember that owning a property twice the size of your neighbours doesn't automatically mean it's worth double the amount (as seen from the statistics above). There tends to be an upper limit for any property in a particular area, regardless of size.
In conclusion, valuing a Greenwich property based solely on the price per square foot can be misleading and fail to capture your next home's unique qualities and emotional attachment.
By taking a balanced approach, considering both practical aspects and personal connection, you'll be better equipped to make an informed decision that aligns with your needs and aspirations as a first-time buyer.
Kind regards
Your Greenwich Estate Agent
P.S. If you want to pick my brains on any aspect of the Greenwich property market, don't hesitate to get in touch with me. I would be more than happy to help you.”
(And if you are reading this on social media, our blog or via email, that offer goes for you as well - we are here to help you).