What are the factors that give a place value?

Little Green Street, Kentish Town, London: probably quite valuable. Image: Getty.

The value of place is simultaneously the most discussed and the least understood of all things. House prices used to be the leitmotiv of a million clichéd dinner parties – no more, I think – but what we mean by the value of an actual neighbourhood and what drives that value is not only little discussed. It has, until recently, barely even been studied.

Create Street’s new report, Beyond Location, tries to answer this question. We have taken advantage of new techniques for analysing values as well as the big data revolution. We have conducted a uniquely wide, data-rich analysis of every 2016 property sale in six English cities (London, Birmingham, Manchester, Leeds, Liverpool and Newcastle).

This has used open datasets to compute basic urban characteristics, such as street network connectivity, population density, amount of greenery, availability of different transport modes. The point of the analysis was not to investigate them separately, but together – and to permit city-wide conclusions and inter-city comparisons.

The findings – part predictable, part surprising – tell us much about the state of our cities. One thing they do show is that urban form really does matter in understanding value. Our models for urban form can predict up to 74 per cent of the official UK poverty index – the Index of Multiple Deprivation – and up to 54 per cent of sales values.

How do specific characteristics affect the value of a London property?

Our key findings include that more greenery is not always a good thing. The immediate presence of attractive greenery or high-quality parks can add huge value in many situations. However, at the city-wide level, the presence of more greenery can be associated with lower as well as higher value. What it is and how it is managed really matters. For example, in London, a home closer than average to a high-quality park costs, on average, 11 per cent (or £51,000) more than one that is not, holding everything else equal. However, in Liverpool, a home located closer than average to a high-quality park is worth, on average, 7 per cent (or £7,760) less. 

Land use and form also matters. We found significant relationships across the six cities between urban form and deprivation and value. Areas of high population and high areas of unbuilt land – for example, high-rise estates with lots of wide-open space – are less valuable and often associated with more deprived communities. This might be partly due to the history of post-war building but, after thirty years of right to buy, most people who can afford to choose continue to avoid this type of urban pattern

Population density and deprivation in London. Click to expand.

The heritage premium is more important than the new build premium. In every city studied, proximity to a listed building was associated with more additional value than the premium associated with a newly built home. A home closer than average to a listed building in London is worth 10.3 per cent (or £49,770) more than one that isn’t, holding everything else equal. The equivalent new build premium is only £8,795.

The findings also highlight a clear difference between London and the other British cities. Accessible income is driving an urban renaissance in London out of all proportion to that visible elsewhere in the UK. Walkable street-based networks or older properties have a value premium over other neighbourhoods which far exceeds that yet visible in other cities. Proximity to a listed building is associated with nearly seven times as much value premium in London as in the other cities studied.

Finally, diversity is valuable. Areas with more diversity of house types suffer from less deprivation. Areas with a more diverse offering of transport and amenities are normally worth more, other things being equal. Above average amenity diversity is associated with additional value in all cities studied.

Property value and connectivity in Newcastle. Click to expand.

Value is a fraught term. Extra value is not always a good thing – certainly not for everyone. In globally successful cities, spiralling house prices are forcing out existing communities. There are ‘sorting effects’, where the better off out-compete the less well-off for the best places.


The ultimate aim of this study therefore is to help developers to build and planners to permit more good places by understanding human preferences more richly.

One thing is for certain though. When it comes to understanding, and predicting, economic and social value, urban form and design really matters.

Alessandro Venerandi is a researcher and urban designer at Create Streets. He has recently completed his doctorate in urban sustainability and resilience at UCL. Beyond Location is available here.

 
 
 
 

Can you have capitalism without capital? Brighton, Ankara, Ghent and the intangible economy

The Fusebox, Brighton. Image: WiredSussex.

As you head north out of Brighton on the A23 things take a distinctly granular turn. The cool bars and trendy eateries give way to second-hand shops and nail bars.

Looming over the area, New England House, an eight-storey brutalist office block, is home to Wired Sussex, a collection of digital and media companies, as well as its offshoot The Fusebox. Here, a collection of entrepreneurs, tech visionaries and creative technologists are seeking to transform their ideas into successful businesses. This island of cutting-edge thinking, surrounded by the evidence of the glaring consequences of austerity, could stand as a synecdoche for the suddenly vogueish concept of the “intangible economy”.

Towards the end of last year, on Radio 4’s Start The Week, Jonathan Haskel, author of Capitalism Without Capital, laid out the features of this brave new economy. The ideas are scalable, have sunk costs, their benefits spill over, and they have synergies with other intangible assets. All of these things are, to a greater or lesser extent, attributes featured in the virtual reality games, apps for care home workers, and e-commerce ideas mapped out by the bright sparks in the Fusebox.

Its manager, Rosalie Hoskins, explains that it exists to support the work of small companies doing creative work. Within these clean white walls they can bounce their ideas off each other and reap the fruits of collaboration. “We’ll provide the doors,” she says. But “it’s up to them to open them.”

One innovative thinker hoping to make her entrance is Maf’j Alvarez. She tells me she studied for a masters in digital media arts at the University of Brighton, and describes herself as an ‘interactive artist’. “Right now I am playing with virtual reality,” she tells me. “There’s a lot of physics involved in the project which explores weight and light. It definitely has a practical application and commercial potential. VR can be used to help people with dementia and also as a learning tool for young people.”

The Fusebox, she says, is “about collaboration. The residents of the Fusebox are in all a similar situation.”

The willingness to work together, identified by Haskell as a key element of the intangible economy, is evident in the Fusebox’s partnership with like minded innovators in Ankara. Direnç Erşahin from İstasyon, a centre for “social incubation” based in the Turkish capital, visited the Fusebox toward the end of last year.

“It was a good opportunity to exchange knowledge about the practice of running a creative hub – managing the place, building a community and so on,” he says.

Erşahin and his colleagues have launched a fact-checking platform – teyit.org – which he believes will provide “access to true information”. The co-operation between the Fusebox in Brighton and İstasyon in Ankara  is “a good opportunity to reinforce a data-oriented approach and university and society interaction,” he argues.

But the interaction between wider society and the denizens of the intangible world is often marked by friction and, ironically, a failure of communication.

This point is underlined by Aral Balkan, who runs a company called indie.ie which aims to develop ethical technologies. “There’s a good reason we have a trust problem,” he says. “It’s because people in mainstream technology companies have acted in ways that have violated our trust. They have developed systems that prey upon individuals rather than empowering them.”

A former Brighton resident, Balkan is almost a walking definition of Theresa May’s “citizen of nowhere”. He is a regular speaker on the TED and digital circuits, and I crossed paths frequently with him when I covered the industry for Brighton’s local newspaper. He left the city last year, chiefly, he tells me, in protest over the UK government’s overweening “snooper’s charter” laws.


He has Turkish and French citizenship and is now based in Malmö, Sweden, while working with the city of Ghent on a radical redevelopment of the internet. “Ghent is a beautiful example of how location affects the work,” he tells me. “They don’t want to be a smart city, they want to encourage smart citizens. We are exploring alternatives.”

Karl-Filip Coenegrachts, chief strategy officer at the City of Ghent, is another believer in the synergies made possible by the intangible economy. “The historic perspective has impacted on the psychology and DNA of the city,” he says. “The medieval castle built to protect the nobility from the citizens not the other way around. People in Ghent want to have their say.”

Left out of this perspective, of course, are those who cannot make their voice heard or who feel they are being ignored. The fissures are easy to find if you look. The future of Belgium’s coalition government, for example, is threatened by Flemish nationalists in the wake of a scandal over the forced repatriation of 100 Sudanese migrants. In Ankara, President Recep Tayyip Erdogan has purged local government and continues to stamp on any dissent.

In the UK, the gig economy makes headlines for all the wrong reasons. Back in the area around the Fusebox, the sharp observer will notice, alongside the homeless people curled up in sleeping bags in charity shop doorways, a stream of gig-worker bikers zooming from one order to another.

The intangible economy throws up all-too tangible downsides, according to Maggie Dewhurst, vice chair at the Independent Workers Union of Great Britain. She gives short shrift to the idea of ‘capitalism without capital’.

“It does get a bit irritating when they muddy the waters and use pseudo academic definitions. They pretend tangible assets don’t exist or are free.”

In fact, she adds, “The workers are a human resource.”