KUALA LUMPUR: The construction of a new bypass adds an average of 15% to the value of homes in the town or village that benefits though local house prices can be boosted by as much as 30%, a new analysis on locations in the UK by Savills show.
The property advisory’s residential research team had analysed the impact of house prices in 24 locations in the UK where a bypass was opened in the past ten years. The team studied house sales recorded by the UK Land Registry to calculate the rise in value of affected properties before and after the construction of the bypass.
Overall, residents of towns and villages freed from the blight of through-traffic thanks to the bypass gain an average of 15.3% boost to the value of their homes in addition to any underlying market-led price movement in the wider area, said Savills.
The report also found this value boost occurred soon after construction. Prices then reverted in line with average price movements within their region. A study of properties bought and resold within two years before and after the opening of a bypass showed an almost immediate average of 13.8% boost to values.
This contrasts with other major transport improvements where there is usually a degree of property speculation when the project is announced, followed by progressive price growth in anticipation of improved connectivity. In the case of a bypass, the traffic blight remains until the bypass opens and values appear to remain suppressed as a result.
The bypass uplift varies significantly according to location, but is pretty evenly distributed at an individual town or village level. The limited number of house sales at a small village makes analysis unreliable, but in locations where there is evidence based on at least 100 sales around the opening of a bypass, the average uplift in values has ranged from 9% to 30% with the greatest seen in Rothwell, Northamptonshire, thanks to the construction of the A6 bypass.
“Clearly, properties closest to main thoroughfares will benefit most from a bypass,” said Lucian Cook, director of Savills research, who conducted the research.
This article appeared on the Property page, The Edge Financial Daily, June 24, 2011.
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