What makes property prices in Hampstead and Highgate so high?
- Credit: Archant
Highgate and Hampstead are key prime residential neighbourhoods but what exactly are people paying for when they buy property there?
A list of the top five things that add value to an area compiled by Yahoo finance provides some suggestions of what could be helping to inflate those £1 million + price tags.
Good state schools
Proximity to a good state school is one of the classic factors for inflated property prices. The national average premium is an additional £21,000 according to Lloyds Bank.
As with much property related wisdom, London bucks the trend in this respect and prices are actually 1 per cent lower in the best state school catchment areas in the city.
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North London prime residential areas are not well-served by top ranking state schools.
Henrietta Barnett is a notable exception but with 2,000 applicants for 93 year 7 places competition is stiff. They are extremely selective in their admissions policy and entrance is by exam ranking.
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Hampstead and Highgate are havens for independent schools though, and boast some of the best in the country. So to benefit from the best local schools, residents will in fact be paying twice, for the prime London location, and the school fees.
The tube has long been a big draw for house buyers and Nationwide figures suggest that homes within 500 metres of a London Underground station are £42,000 more expensive than those 1,000 metres further away.
If the Northern line were wiped out, Hampstead property prices would drop instantly from their current average of £1,328,320 to £1,286,320.
Highgate Village homes would remain unaffected as transport links are not one of the area’s biggest selling points, so the average £1,292,133 price tag should stay steady.
More recent research by Hampton’s International suggests that properties within a 10 minute walk of a London Overground station see their value increase by as much as 3 pc a year.
So, Hampstead Heath properties should see a London Overground premium of £39,536 over the next year, while Gospel Oak properties should add £27,249 to the current average of £908,308.
According to research by Savills, the ‘Waitrose effect’ – having a branch nearby – can increase the value of a property by 25 pc, and as much as 50 pc in London.
Hampstead and the surrounding areas are well provided for in this respect, with a large branch on Finchley Road, as well as locations in Camden and a Little Waitrose in the offing in West Hampstead.
If these were all to close tomorrow then, theoretically, the average Hampstead house price would instantly fall from £1,328,320 to £885,547.
Highgate is slightly less well provided for, with branches only on the fringes of the area in Muswell Hill, Crouch End and Holloway Road. However, Savill’s do admit that there is an element of chicken and egg in the figures as Waitrose tends to place stores in areas that are already high value.
With prime, hill-top positions, many properties in Hampstead and Highgate boast spectacular views across the whole of London.
Water is not a major local feature however, unless you count the ponds on Hampstead Heath, or the ability to identify the course of the Thames by connecting Battersea Power Station to St Paul’s.
The figures, from Knight Frank, do specify a harbour, estuary or riverside location, though so north London properties are unaffected by the 85 pc premium commanded by these locations.
The average house price in England is currently £276,546, while the London figure is more than twice that at £586,651, suggesting that property values are boosted by £310,105 by dint of being in the capital.
But Hampstead and Highgate are not just any London, they are prime London and command prices more than four times the national average and double those of the city as a whole.