Blighty | House prices

The cost of conservation

By C.T.

CRITICS of modernist architecture would almost certainly disapprove of goings on at Lakeside Drive in Esher, an affluent town within London’s commuter belt. Residents of the leafy cul-de-sac want the local council to apply special protections to their 1970s homesincluding to the improbably named Toad Hall at number 17 (pictured). If granted, Lakeside Drive would become the district’s 25th such “conservation area”. The designation seeks to preserve areas of historic or architectural interest by using strict planning rules to prevent owners from making overzealous alterations to their properties.

Residents have good reason to seek such constraints. Homes within England’s 9,800-odd conservation areas on average fetch 23% more than those without, appreciate faster and push up prices in surrounding streets, according to a study commissioned by English Heritage, a national agency part-funded by the state. Perhaps unsurprisingly, the number of conservation areas has increased annually since their introduction in 1967.

Yet new analysis by the London School of Economics complicates the widespread view that such homes cost more than others simply because of their aesthetic appeal. Researchers have used property transaction data to compare neighbourhoods before and after the local authority granted them conservation-area status. They argue that an average 12-month lag between achieving this status and a rise in property values suggests the market has already priced in any "heritage" factor prior to designation. After stripping out other factors which influence house values, the researchers ascribe a subsequent 0.8% annual price rise largely to locals appreciating that stricter planning rules mean the neighbourhood’s appearance is unlikely to change much.

Particularly striking is the type of person who seems to value such stability. The same team used census data to show that where at least a quarter of a wider neighbourhood has conservation area status, 45% of locals hold university degrees, compared with 17.4% of those living in communities with no designated areas.

Indeed graduates seem so fond of conservation areas that where they go, designations follow. Where the number of degree-holders increases by 1%, an average 11% rise in the neighbourhood’s conservation-area land ensues in the long run. "This is a large effect," says Gabriel Ahlfeldt, associate professor at the LSE.

Aspiring conservation-area dwellers are also more likely to be doing well for themselves financially. In the 20% of England where incomes improved the most between 2001 and 2011, new conservation areas were more than twice as likely to appear than elsewhere. Where they did, residents’ prospects are good: household incomes in conservation areas are 10% higher than those elsewhere.

Heritage workers note that conservation-area designations are increasingly driven by communities. Planning changes that encourage locals to participate in development decisions, and which appear popular with retired professionals, may partly explain this. Another factor is that local authorities, historically responsible for instigating designations, employ a third fewer conservation staff than they did six years ago. Either way, it appears the well-heeled residents of Lakeside Drive are on to something.

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