Fundamentals
In already pricey Hampstead, north London, some buyers will pay a premium for the privilege of bordering this lake on the Heath.
According to the old joke, only two economists in the entire world really know what is going on - and they disagree with one another.
So how are we ordinary mortals supposed to make sense of the property market?
Several times a month we hear that property prices are rising or falling by a certain percentage. There is also data telling us about, for example, mortgage approvals, and whether they are rising or falling. Interest rates, employment statistics, money supply (especially the pool of available mortgage financing) and other tea leaves go into the analysis.
These findings - produced by banks, the government, economists, estate agents, chartered surveyors, newspapers and other sources - are vital for detecting trends, especially when they line up in the same direction. (A good one-stop shop listing most of the indexes and indicators is housepricecrash.co.uk - link opens in new window.)
But they can also mislead - national averages may be of limited value to you as a particular buyer or seller.
Consider a national average showing prices rising 5% per year.
Some locations will be rising at precisely 5% but others will go up only 1% and still others will enjoy increases of 10% or more.
By definition, average means that some are higher, and some are lower. Averages are what the label says, averages. An actual example: the Land Registry house price index for June 2008 showed a decline of 1 per cent for England and Wales generally (the national average for the two countries) but London declined 2.5% whereas the northeast increased by 4.1%. And doubtless, some London properties bucked the London trend and actually rose during that period, and some homes in the northeast similarly bucked that local trend by falling. All property is local.
All Property is Local
On Example Road in Sampleville, Sampleshire SA1 1AA, all of the houses are exactly identical in construction and appearance - but they are not identically priced. Those closer to one end of the road are closer to the train station. They are more convenient and, consequently, more expensive. The houses at the other end - the ones near the sewage treatment plant - are, for similarly obvious reasons, cheaper.
Other factors apply to this single road. One particular house is owned by the council, not for sale, and tenanted by the family from Hades. These occupiers might adversely affect the values of the properties near this house.
Some of the houses on Example Road are in the catchment area of a popular school. Those properties may sell for as much as 20 to 30 per cent more because of that fact.
Within the larger parameters set by mortgage rates and general property price movements, every particular property has its unique features. All property is local - and local means specific houses on specific roads.