In London, flats with private outside space fetch on average 12% more than those without, say London estate agents Marsh & Parson.
Averages however can be unhelpful to individuals. This guy is drowning in a lake that’s five inch deep on average: So let’s get rid of the averages and dig down into the data.
For those building a buy to let portfolio, the crucial question is whether paying extra for outside space is worth it. Only if it commands a proportionally higher premium with tenants is it worth paying up for.
If you are flipping houses or banking on capital appreciation, you also need to consider whether this premium will hold constant over time and whether it is worth creating outside space where there is none.
In any case, not every kind of outside space is created equal.
Rooftop terraces and balconies are the most popular kind of outside space. Demand comes particularly from flat-sharing professionals and dual-income couples. The average rooftop terrace and balcony fetches 8% extra, notably more than the 5% typically attributed to gardens.
While gardens are the most popular with families with young children, the lower ground floor situation of many garden flats in the capital can put off tenants and buyers looking for low maintenance.
The old adage that an Englishman’s home is his castle also holds true. While private outside space is highly sought after, shared gardens and rooftops only raise the price of a property by half. The exception to this are properties with access to London’s prestigious landscaped garden squares, whose attractive sweeping views even in winter avoid the seasonality effect other garden properties suffer from.
If you are looking to sell a flat with outside space that isn’t a well-maintained garden square, try to avoid selling in autumn and winter. The premium for outside space falls to around 1-3% in those months, as gardens and terraces look less attractive and not immediately useable to prospective buyers.
In order to futureproof your investment, keep the classic economic model of supply and demand in mind.
Have a look at trends amongst tenants and homebuyers. Londoners spend more and more time in their gardens and put bistro furniture on the smallest of ornamental balconies. When it comes to maintenance however, the trend towards serviced living with cleaning, laundry and other maintenance taken care of will lead to high-maintenance outside space seeming less attractive over time.
On the supply side two contrasting forces are at work. Currently only a third of London properties have outside space but developers are catering to Londoners’ love for a spot in the sun so many more new-builds have some sort of outside space. For those who enjoy a good period property however, supply is fixed and having outside space is rarer and more valuable as London’s population grows.