Location is most important factor determining the value of property in UK

Location is the most important factor affecting the value of a property in the UK real estate market, according to research from the country's biggest mortgage lender.

Creating more space by building an extension or adding a loft conversion are also factors that increase the value of property, says the Nationwide.

An increase of around 10% in floor space leads to a 5% increase in value in a typical property and 7% to a detached house. And adding an extra bedroom or bathroom in a loft conversion could boost the price of the property by up to 20%.

For example, adding a 13 square metre double bedroom to a two bedroom house can push up its value by 11%, the Nationwide says.

'Location is still the biggest factor affecting the value of property and a house in the best neighbourhood can command a price nearly 50% higher than a similar house in an average area,' explained Nationwide chief economist Martin Gahbauer.

Overall similar homes in the most desirable areas cost 98% more than ones in the least desirable locations, although some of the difference is likely to be due to the fact that homes in well-off areas tend to be better maintained.

Even compared with average areas, properties in neighbourhoods populated by prosperous professionals typically sell for a 47% premium, the equivalent of £75,000.

But homes in areas where families are struggling to get by are generally worth 26% less than similar properties in average neighbourhoods.

Typically property in Wales costs 50% less than in London and in Scotland they cost 40% less than similar properties in equivalent areas of the capital city.

'In a buyer's market homeowners are keen to know which characteristics are likely to make their home relatively more attractive and which ones may detract from the price,' added Gahbauer.