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Quality of place 'increases' value of dwellings

Words: Laura Edgar

Creating better places to live can substantially increase the value of dwellings and sustain premium values over a longer period, according to new findings.

Placemaking And Value, published by the Royal Institute of Chartered Surveyors (RICS) and produced by real estate company CBRE, also concludes that place-making has never been more important in creating “thriving sustainable communities”.

The research considers five case studies – Newhall in Harlow, Kings Hill in Kent, Upton in Northampton, Accordia in Cambridge, and Hampton in Peterborough – and looks at the relationship between place-making and commercial value.

RICS says a key finding of the research is that creating better places where more people want to live enhances financial value and can secure substantial commercial premiums.

Speaking at the report's launch, one of its consultants and lead authors, Helen Gray, an associate director at CBRE, explained the structure used during the research to assess place-making. The key elements examined by the study were:

  • The development team – the quality of the team;

  • Clarity of vision;

  • Quality of architecture and design;

  • Layout;

  • Commercial and community provision – looking at the contentious issues early on in the design process;

  • Public and private amenity space;

  • Transport, car parking, accessibility and walkability;

  • Effective community engagement – how is this done in practical terms; and

  • Sustainability.

Each element was graded according to its performance for each case study, which gave the average value premium. The case studies, said Gray, showed an uplift of between 5 per cent and in one case, 56 per cent.

“We noticed there was real difference in areas that were already fairly affluent with not just higher house prices, but uplift was much larger. So in these examples it’s Accordia in Cambridge and Kings Hill in Kent. In more challenging locations like Upton, which are outside the new towns, house prices are inherently always going to be lower so the uplift on the houses are lower. It was interesting to see you could deliver a relatively affordable project to good design qualities and create uplift in more challenging locations,” said Gray.

The research also suggests that place-making achieved uplift in commercial value on small homes with people paying a premium to live in a good place even if this means compromising on space. Additionally, the provision of community and other facilities must be provided as early as possible in the development, but the housing is needed to support the services.

“Retaining flexibility in the masterplan was important to allow the scheme to evolve” – report

Tony Mulhall, associate director at RICS, said in light of the need for sustained housing delivery, place-making has “never been more important” in creating “thriving” communities where people want to live, work and play.

“Strong leadership is needed in development teams with a clear vision and ambition from the earliest point. Masterplanners, landowners and developers need to work together with the support of the local planning authority to deliver through the political and economic cycles.

“The proposition is simple - if developers create places that are well planned, well designed and well built, people will pay more for them,” he said.

The research analysed residential property value date from the Land Registry as well as using site observations, discussions with developers and agents, community groups and planners.

The research can be found on the RICS website and is available to members.

Image credit | iStock