How to know if your home will go up in value

Buying a home is a big investment and an important one for your future. With so many properties to choose from, how do you know if the home you’re buying will give you returns over time? How do you decide where to live? In this article, you'll find out how to avoid overpriced homes and find the best undervalued and cheapest areas to buy in the UK to make sure you can buy with confidence.

What goes into the valuation of a home?

Hundreds of thousands of homes are bought and sold each year in England and Wales and of course every home is unique in its own way. The value of a house is determined by two main factors; how it is presented and where it is situated. But within these two categories there are hundreds of nuances which start to make comparisons, or analysis extremely difficult.

There is the element of experience your local estate agent can bring to the table to give you some indication of property value, but this is based on prices today, they can’t begin to consider the future. The combination of valuation and forecasting gives a full picture of the growth potential of your home making sure your home is a worthwhile investment.

Using machine learning to predict the future

That’s where our Proportunity Home Index (PHI) comes in, which is powered by machine learning technology that processes and memorises past events on a vast scale, identifying patterns and trends. PHI powers our data analysis to consider what makes every house unique and attribute a price to those nuances. At the same time it can look at the wider economic, environmental and social data and identify patterns and trends. Further, it can take complex data and trends from one area and match it to comparable activity in a totally different geographical location. This is when things get really interesting. Looking at data on a large scale and finding similarities the data evolves and you can start identifying patterns. 

What's all the talk about 'up-and-coming' areas?

You hear about people buying in up-and-coming areas because developing infrastructure has the greatest impact on the value of a home. For example, our PHI identified Birmingham's Top 10 undervalued areas to buy including Edgbaston. Taking Edgbaston as an example, this area has plenty of green spaces with plans for improvement including nearby Edgbaston Reservoir and Summerfield Park. With the development of HS2 underway, the area will see significant increase in property prices.

So what else affects a property’s growth potential?

We started building PHI in 2016. We feed in the different dimensions which impact a property price; taking into consideration factors such as Energy Performance Rating, floor area, house type, transport links, crime rates, employment, social housing, demographics, socioeconomic factors, historic and current house prices, affluence and green areas. Now we have years of data which is continuously being updated and drives the engine behind our investments. With a complex map of data sources that we gather from, we are able to build an accurate picture of what the growth potential of homes will look like.

In it together

PHI is easy to use and helps you identify whether the home you’re looking to buy is fair valued, undervalued or over priced. It helps us too because we only lend against fair and under valued homes, giving you, and us, confidence in your investment to make sure that your home has the best potential to go up in value. Our shared equity loan boosts your budget, but also allows you to buy a home that could give you greater returns in the future.

Check out our findings

We release new findings that our PHI discovers, to bring the best hidden gems and areas with the highest growth potential to you. Read more:

Top 10 hidden gems in London

Top 10 hidden gems in Liverpool

Top 10 hidden gems in Birmingham

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SSM One Limited (trading as Proportunity Loans) is an intermediary only lender authorised and regulated by the Financial Conduct Authority (with firm reference number 716565). SSM One Limited is registered in the UK at Companies House with reference number 09273700, with its registered office at GG 315, Metal Box Factory, 30 Great Guildford St, London SE1 0HS, United Kingdom.
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