Unlocking the Mystery of Flat Values by Floor Level – A Guest Blog by Corporate Partner, Carter Jonas

As a new corporate member to ILM, our aim is to provide you with the best property advice when you need it, from our multi-disciplinary professionals based across the country.

For more information about us, our corporate page is here.

As such, we are starting a series of mini-articles on a variety of topics which hopefully provide an insight into property and its value.

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We are often asked whether there is a difference in value for flats on the ground floor verses those on upper floors of a building. The obvious answer, to ensure we justify our existence as property professionals is: it depends.

However, in reality, it is not as complex as one might think, albeit when opining on value, it is important to ensure that you compare truly comparable properties.

There are, of course, many factors that impact on value, however this article relates solely to floor level and the below comments assume that all other factors (such as size of property, accommodation, layout etc.) are identical.

In general terms, ground floor flats are not considered the most desirable within a block, due to the potential privacy and security concerns of being at street level, resulting in a need to often keep curtains closed to maintain privacy. That said, this is often countered by the presence of a garden, which generally gets paired off with the ground floor flat.

Lower ground floor flats are typically topped as the least preferable floor level -they not only suffer from the privacy concerns but also often a lack of natural light. The extent of the discount is dependent on how well natural light is able to permeate around the accommodation.

Considering first floor flats – in period conversions, which do not typically have a lift (known as walk ups), the highest values can typically be seen on the first floor, as the privacy issues of the ground floor are diminished. Moreover, first floor flats often retain the period features and grandeur of yesteryear, such as high ceilings and large windows providing good natural light.

Values then tend to tail off for each additional floor level beyond the first floor, as occupants are less willing to walk up more flights of stairs.

In blocks with a lift, this pattern is upended, with values rising the higher up the building one goes, due to lesser noise pollution from street level, improved views and light levels (particularly in more crowded locations with neighbouring high rise buildings), often with a “penthouse premium” being achieved on the top floor.

So, when trying to consider the value of a bequeathed flat prior to going to market, it is important to ensure you are considering flats on similar levels and within blocks that also have a lift – or not. We can, of course, provide any guidance as required.

One final comment, the National Association of Estate Agents (NAEA) suggests that there is, on average, a 10% difference in value between those flats in blocks with lifts and those without. However, this is a somewhat crude generalisation and we would suggest that there may be other factors impacting this. For example, blocks with lifts are more likely to be newer than walk up blocks and it may be the age of the building which is also impacting this percentage. Moreover, one must also bear in mind service charges which are likely to be higher in blocks with lifts due to servicing, maintenance and repairing costs. Such service charges may continue to mount and therefore sound advice is required when considering a disposal strategy – a topic for another article.