How Much is My House Worth?
The Ultimate Guide
With lots of practical ‘how to’ advice, our latest guide’s aim is to dispel the mystery when asking how much is my house worth. It’s been written specifically to give you all the tools to discover how to value your own property today.
What you’ll discover
- Some of the misconceptions regarding house valuations
- The truth behind how estate agents really work
- The best ways to add value to your house
- How to use intelligent online property valuation tools
- Why you shouldn’t trust free online house calculators
- The quickest way to sell your house
Quick Page Navigation
- Why getting an accurate house valuation is so important
- How overpricing can result in underselling (costing you £1,000’s)
- Common misconceptions in calculating house price valuations
- The 6 factors that will determine how much your house is worth
- How are houses valued?
- Understanding the difference between market value and marketing price
- Comparing estate agent valuations with online property valuation tools
- How to get fair house valuations from estate agents
- What to ask an estate agent when selling
- Using online estate agents
- Using online property valuation tools
- The problems with free house price calculators
- How does Zoopla estimate house prices?
- How accurate are Zoopla estimates?
- How to add value to your home
- How to use house price data to determine open market value
- How to find out what similar properties have historically sold for
- How to find out what similar properties have been selling for most recently
- How to find what similar properties are on the open market for today
- How to find what similar properties are failing to sell for currently
- How to use intelligent house price tools
- How to sell your property when speed of sale is most important
- How to get a free, no obligation, offer for your house today
Part 1. Why getting an accurate house valuation is so important
No matter what somebody tries telling you, the simple truth is your property is worth what somebody else is willing to pay for it. This should be your guiding principle when looking to sell your property. It’s fairly straightforward when you stop and think about it. Whilst we may think we have a fair idea of our house’s value, somebody else may think your house is worth something very different. This is because houses are fairly subjective things.
And so selling your house is not so much a science but something of an art form. Putting an accurate value on your property requires some time and thought.
The first thing to really understand is the basic principle of value when selling a property.
How overpricing can result in underselling (costing you £1,000’s)
There’s one common practice in selling houses that we feel very strongly about and it’s overpricing. By overpricing at the outset, you could be setting yourself up to lose out. Here’s how this works:
- First you set your asking price for 5 – 10% more than the open market value in the hope that you may achieve it
- Your property sits on the market for a few weeks with limited interest and whilst doing so helps make competing properties look more favourable. Some even sell!
- You then reduce the price somewhere closer to the open market value in order to gain more interest
- Your property gets noticed but potential buyers start to ask your agent why it hasn’t sold yet and hesitate. They’re becoming suspicious and start to think something must be wrong.
- You continue to chip away at your asking price until the point it is advertised at the original open market value – you begin to ask yourself how much is my house worth?
- You get a number of viewings but no firm offers and also notice that competing properties have now been marked as ‘sold (subject to contract)’
- You reduce your price further so that it now sits below the open market value figure as you start to become desperate to receive any offer from a qualified and willing buyer
- After some negotiation, you finally agree on a sale at a price that is £1,000’s less than the original open market value but with the feeling of being deflated even though you’ve successfully sold
The lesson here is simple. Having arrived at what you felt was a very real and fair valuation it’s more important to advertise your property at the right figure from the outset. You’ll sell quicker and in a good market, could sell for more than the asking price as buyers compete to buy your property!
Common misconceptions in calculating house price valuations
As a nation, we brits tend to air on the optimistic side when setting the price of a property. With thoughts ranging from what we feel is the right price through to what Aunty Mable over the road thinks. But thinking like this can lead to huge disappointment. Here’s a shortlist of the five greatest misconceptions we’ve discovered over time when trying to put a valuation on a property:
The 5 greatest misconceptions that will not affect how much your house is worth
How much you originally paid for it
The cost of any improvements you’ve made since
How much your friends and colleagues think it’s worth
How much you need to sell your property for
How much you’d like to sell it for
What does affect how much your house is worth?
It’s no surprise that location and size play the biggest part in the value of your house. Let’s take a look at how each of the 6 factors affect how much your house is worth.
Make no mistake, location plays the single biggest part in determining the value of your property. And this makes perfect sense. The old mantra location, location, location still holds true. Buying a property in a sought-after part of town means when house prices are rising, you’ll see a significant uplift in value. This is because buyers will flock to such areas. The same cannot be said of course when buying in less desirable areas.
Perhaps it’s no surprise that size comes high up on the list of factors that affect how much your house is worth. The number of bedrooms your property has will be the single biggest factor when it comes to determining the value of your property. This will be closely followed by sizes of gardens, bathrooms and the kitchen. And let’s not forget that home offices, garages and sheds also play a part. The overall layout of your property i.e. how well it flows, will also have a bearing. Buyers will also often look at the scope for conversions or extensions. Both are recognised as great ways of adding both practicality and value.
Property values are also influenced by both the number of buyers in the market at any one time and the types of property being sought. These range from detached, semi-detached and terraced houses right through to flats and maisonettes that offer more space.
It may come as a surprise to discover that condition plays a smaller part in valuing a property than location or size. This is because homebuyers often want the chance to put their own mark on a new home. Ultimately, it’s the décor of the property, age of kitchen and bathrooms that will affect your property’s value the most. But interestingly by refreshing these you have the chance of creating that all-important wow factor when buyers first step into your property.
It’s all about first impressions. Re-decorating, tidying up gardens or pressure washing paths and driveways are your best ways of improving the saleability of it. Think how you feel when you first arrive at a property.
What most homebuyers tend to over overlook is the energy efficiency of a property and we feel this should play a bigger part in the buying process. After all, running costs are an important factor of any home. You can find out a great deal more about the energy efficiency of a property by simply taking a look at it’s Energy Performance Certificate or ‘EPC’. These can be found by simply searching online for the ‘EPC register’ and entering a postcode. A property’s EPC will provide some idea of any measures necessary to make a property more energy efficient.
Ultimately when it comes to selling your property any buyer using a mortgage lender will need to have at least a RICS Home Survey Level 1 valuation report produced. This report will provide fairly basic details on the general conditon of your property. However, your buyer could opt to order a more detailed Home Survey Level 2 or 3 both of which give provide a far greater level of detail of a property’s overall condition. These levels of survey often result in buyers wanting to re-negotiate the purchase price of a property. This is so that the most urgent highlighted maintenance issues can either be resolved prior to completion or immediately after.
Property market activity
Just like any other market, the housing market is driven by the laws of economics – supply and demand. And these two factors dictate that type of market we are in at any one point in time. How much your house is worth often depends on market conditions. For the housing market we call a slow or ‘cold’ market a buyer’s market and a fast or ‘hot’ market a seller’s market.
A buyer’s market is the time when the housing market is running slow or is sluggish. During this period houses take a time to sell as confidence/sentiment is generally weak. This is when buyers are more able to call the shots when negotiating a purchase. Competition amongst sellers will be running high as they compete to sell their property. An example of this was the financial meltdown of 2007/08 or during the early stages of the Covid-19 pandemic in 2020.
By contrast, a seller’s market is when the housing market is buoyant or booming, allowing sellers to set over-optimistic prices and sometimes achieve them. At the same time, sellers will also have their pick of buyers. An example of this is the meteoric rise in property values following the Covid-19 pandemic as pent-up demand took hold and there was a ‘race for space’.
Schools still play a vital part in determining how much your house is worth. Parents will follow Ofsted league tables in pursuit of ensuring their children have a good start in life. Other amenities high on the shopping list include shops, restaurants, gyms and of course parking!
Other local factors
Some buyers look at other local factors. These include any regeneration plans for an area, existing and improving transport links, the potential for flood risk and last but not least crime rates.
How are houses valued?
Houses are generally valued based on the fundamentals of comparing like with like. Estate agents and surveyors call this exercise gathering comparable prices or ‘comps’ for short. In essence, this means comparing your property with the most recent sale of another similar property. However, there are problems with this model particularly when trying to arrive at the open market value. This is because no two houses are the same.
Take the example of a Victorian built 3 bed semi-detached house. If you were to compare this with neighbouring properties you would typically find very real differences. A neighbour could have extended their house and/or replaced both the bathrooms and the kitchen whilst another has never changed a thing. And so, setting a marketing price for a property is as much about having a feel for what the differences between properties are and what these mean in the eyes of a buyer.
Understanding the difference between market value and marketing price
There is a huge difference between the terms ‘market value’ and ‘marketing price’ when it comes to selling property.
Market value is generally thought of as the price a willing and able buyer is prepared to pay with all things being equal. That is to say when marketing a property for sale with a typical marketing period of just 4 weeks. Market value refers to the actual price paid for a property following negotiation.
Marketing price is just that – the price shown on a website or in an estate agents window to gain initial interest. It’s the ‘asking price’ and the starting point from which all negotiations begin.
And so only critical question remains. How do you go about reaching a fair house valuation that will eventually show in the Memorandum of Sale?
Part 2. Comparing estate agent valuations with online property valuation tools
More often than not houses are valued by estate agents. There are two main reasons for this.
1. Agents have for many years built their businesses in the high street. Whilst we may think that everything happens online nowadays, buyers and sellers still like to connect with local estate agents. We think this probably goes back to your house possibly being the largest investment you’re ever going to make. The feeling that you need to have a one-to-one discussion in person rather than via a telephone or computer can be overwhelming.
2. Because estate agents offer house valuations as a free service in a bid to eventually win your instruction to sell your property. In doing so they can make your life easier as you avoid having to all the research yourself.
The problems with estate agents
But there can be real problems with this. Unfortunately, the estate agency world is a fairly cut throat one and this often leads to dubious estate agent’s tricks. Let me explain a couple of these.
Firstly, most home sellers will invite three estate agents to value their property. What typically happens is most agents will first work hard to build a rapport with you. Of course, they’ll lead with many pleasant things to say about your property. However, in the end they’ll try to outbid each other by advising you that your home is worth more than the previous agent told you. In doing so you’re likely to feel flattered and it’s reasonable to believe the highest marketing price is fully achievable. It’s only human nature right? Finally, the agent will want to leave advising you of how estate agents fees work.
Other estate agent tricks of the trade include being told they have buyers ready and waiting. You’ve probably seen the leaflets pushed through your door shouting ‘another sold in your area’ or ‘we have buyers waiting’. In truth, buyers don’t really wait. Instead, they scan the likes of Rightmove and Zoopla on a daily basis until such time as they see something they like and then pounce. If they’re very serious, they’ll also have set up Zoopla or Rightmove alerts so they get instant text and email notifications of all new properties the moment they are listed.
How to get fair house valuations from estate agents
The good news is that getting a free house valuation from an estate agent isn’t impossible. You just have to be very choosy over who you invite to put a price on your property. We’d first recommend Googling local estate agents and choosing those that have the largest number of 5 Star reviews. Look for reviews from sellers that speak highly of the agent having sold quickly and at the original asking price or even more.
And don’t just go for the biggest names and brands in the business.
From our experience, it’s the independent agents that have been in business for 10 years or more that work the hardest. They’re often family run agents meaning they live or die by their results. They have a vested interest in making sure things go right from the very start. Pick the right one and you should be off to a great start.
How long does a house valuation take?
An average house valuation by an estate agent will take around an hour. A good agent will have already done their homework on sold property prices before they arrive. This will give them a good handle on the value of your house. The purpose of their visit is to check the property for overall condition and to see if they can convince you to instruct them.
What to ask an estate agent when selling
Whilst you’ll be keen to hear the agent’s valuation figure there are some important questions you’ll need to ask first. You’ll want to know how successful the agent is in selling houses in your immediate area and price bracket. Ask for hard evidence and don’t be afraid to speak up at this point. Consider asking for testimonials from recent sellers. It’s imperative that you feel the agent has more than a fighting chance of selling your property and with the best possible result.
Next, you’ll need to know on average, how long will it take to sell my house? If the agent stalls when asked this question it could point to a lack of confidence in selling promptly. At this stage you may wish to consider using a different agent.
Remember to ask agents if they know of good solicitors that specialise in selling properties. They will be able to help with understanding the conveyancing process.
Finally, you’ll want to know the agent’s fees for selling. Don’t be afraid to negotiate hard. You may want to consider offering them an incentive if they were to hit a certain price target. Some agents offer this as a matter of course although it’s still fairly rare depending on where you live.
Using online estate agents
Today there’s lots of choice in using fixed fee, online estate agents. Since the onset of the internet, online agents have sprung up everywhere as they seek to disrupt the traditional high street estate agent’s world. They each believe they could save you £1,000’s selling your house online. Conversely, the reverse can actually be true.
Online estate agent’s include the likes of:
Whilst all of the online estate agents will offer a fixed fee (low cost) service and sometime as low as £999, experience tells us that selling your house this way may not be the best way. Using the cheapest way of selling a property possible could actually do you more harm than good. It could mean you leave £1,000’s on the table.
Let me explain.
We’ve come across many examples of properties selling via online estate agents for less than their true market value. The differences can be as small as a few thousand pounds right up to as much as £10,000’s! The reason for this is because most online estate agents work from a centralised office. This means they can’t possibly know your immediate market and hence who’s buying at the moment. And this is more important than you may at first think. The reality is online estate agents are somewhat detached from your local property market.
Compare online estate agents with high street agents and it’s easy to see the differences. A high street agent will know your local property market inside out. It’s their job at the end of the day. They’ll know who’s buying in the area and what’s driving demand right now. And the difference in knowing all of this could be crucial to you getting the very best price for your property. Why would you leave all of this to chance by using an online estate agent?
Using online property valuation tools
In order to use some of these you’ll need to create a basic account. Once you’ve done this, you’ll have free access to use the service as often as you like.
Some of the calculators simply ask you to input the original ‘price paid’, ‘date paid’ and ‘region’. They then simply apply a percentage to the figure based on what’s happened to house prices over the period.
Other calculators take their data from HM Land Registry in order to calculate today’s value. These tend to be more accurate in our experience. Perhaps this is because they work from the standpoint of using an algorithm that extrapolates real data from recorded house sales.
The problems with free house price calculators
Trying to decide which house price calculator to use can be quite an exercise. It’s fair to say each of them has a place. But you shouldn’t rely on any one of them to provide a 100% accurate value of your house. Some will produce sensible values whilst others will present wildly optimistic figures. Others will produce numbers that appear simply ludicrous. This is certainly the case in cold markets as buyer sentiment hardens and the calculators struggle to represent this in a timely way.
What we’d recommend is trying each of them to see the figure you arrive at when entering your postcode. Once you’re happy that you have a bunch of similarly ‘relate-able’ figures you could then use the law of averages by simply adding up the total of the figures and dividing this by the number of results. We often find this gives you a far more reasonable idea of an individual property’s true market value. It may sound strange but it does work!
How does Zoopla estimate house prices?
In order to calculate house prices, Zoopla aggregates data from many different sources. This includes HM Land Registry, Ordnance Survey, Royal Mail & Registers of Scotland. The data includes information on sold property prices, numbers of bedrooms and local amenities such as schools. This means Zoopla are able to calculate house prices for approximately 26 million households in the UK. You can get a free house valuation by simply googling ‘Zoopla what is my house worth?
How accurate are Zoopla estimates?
Zoopla are possibly the largest offender in generating wildly inaccurate house prices. This has been shown time and time again. The real problem here is that most home sellers would expect to receive a reasonable valuation having gone to the trouble of entering their information. But the reality is very different. And the problems only grow as you start to test Zoopla estimates across a number of properties.
How to add value to your home
Before embarking on any work it’s important to understand that not all home projects automatically add value to a property. Some simply make your property easier to sell. For example, a simple re-decoration could be all you need to make your house pop when photographed. This could be the difference between having no viewings and being inundated with them. Ask yourself how much is my house worth currently and would such changes add to the property’s overall value.
We’d recommend adding an extension or roof conversion to create rooms. Did you know that an extra bedroom could add a whopping 10% to the value of your house? But be careful with this. If your area is one where four bedroom houses are in real demand and buyers aren’t looking for anything bigger, it may not make financial sense to add a fifth bedroom. It all comes back to understanding your local market. This is where a good estate agent could advise best.
Did you know that adding an extra parking space can in most cases add £20,000 to a property?
Finally, for the biggest bang for your buck, getting planning permission to add a sizeable extension could be a great way of selling for more than you had bargained for without carrying out any building works.
Part 3. How to use house price data to determine open market value
Provided you have the time you should be able to do a reasonable job in establishing the value your property yourself. You just have to be sure to only deal with real facts as you’ll need to refer to them when drawing comparisons between properties.
How to find out what similar properties have historically sold for
To get a true feel for how much your property is worth you’ll need to start by first researching what similar properties have sold for in the past. By the past, we mean just the last 6 – 12 months.
The good news is that all of this information is already in the public domain. Since April 2000 HM Land Registry has been making this information widely available. The job of HM Land Registry is to record all house and property sales and their database is fairly accurate. That’s not to say they don’t make mistakes! How do we know this? We sold a property back in 2012 for £126,500. Weirdly HM Land Registry recorded this as £129,500 We have no idea why. Perhaps it’s just plain old human error.
Over time we’ve also noticed a good number of house sales are never recorded. This can be frustrating when you know information is missing. Again, we have personal experience of this as a property buying company that has bought many houses over the last 20 years.
By far the best way to view sold property prices is to use one of the two leading UK property websites Rightmove or Zoopla:
Be careful in how you interpret the numbers. Data provided by HM Land Registry can be up to 6 months old as it takes time for house sales to be recorded. As we already know, house prices are not a static thing as the housing market is capable of swinging in just a matter of months. A change in housing market sentiment is all it takes to move prices upwards or downwards. Regardless, any information gathered will certainly help in building an overall picture even if there is such a swing.
How to find out what similar properties have been selling for most recently
Surprise, surprise, both Rightmove and Zoopla have all of this information ready and waiting for you too. It’s important to remember that whilst you can see the marketing price and a ‘SOLD’ or ‘SSTC’ next to this, it doesn’t mean this is the price the sale has been agreed at. And some properties will have been listed as ‘POA’ (price on application) making it hard to establish latest prices. Again, you won’t know a property’s actual sold price until the sale has been completed and recorded at HM Land Registry. And as you already know, this could take up to 6 months.
Using either of the sites you can carry out a search using your own postcode and selecting a radius of just ¼ mile to keep things specific. Be sure to select all of the similar features to your own property such as number of bedrooms, style of property etc. Ensuring you’ve also selected ‘Under Offer’ or ‘Sold’ and clicking on ‘Find Properties’ this should instantly bring up a list of recently sold properties. These are the sales that agents have agreed and are proudly showing. They do this in order to promote their success to other sellers just like you. If there are no results, you may have to widen the search to ½ mile.
How to find what similar properties are on the open market for today
Drawing up a list of similar property’s currently for sale is made easy on Rightmove or Zoopla. Simply remove the ‘Under Off or Sold’ filter, keeping your area search as narrow as possible and click ‘Find Properties’. This should show a number of properties you can then compare to your own.
First things first – you’re looking for properties that have the same footprint as your own. This ensures you are comparing like with like. You can do this by looking at the floor plan (a legal requirement when selling properties) and checking there haven’t been any structural alterations such as loft conversions or extensions.
Other things to consider are the age of the main features such as the kitchen, bathroom and overall condition. How do these compare to your own property?
Ask yourself – do I need to make any allowances for what it may have cost to make such changes? If so, factor these into your overall calculations.
How to find out what similar properties are failing to sell for currently
This search can be both interesting and very telling. The best bit is you get to snoop on who’s struggling to sell and it’s great fun trying to work out why. To do this, select ‘Oldest First’ from the dropdown menu and this will show in date order all properties that remain unsold. You can then see the price of each property and most interestingly the date it was first listed on the site. This could be anything from a couple of months to years.
By looking at each house carefully you should be able to start picking away at why they are stuck on the market. Ask yourself;
Is the description poor?
Is the property dated?
Is the marketing poor?
Does it have structural problems?
Is it overpriced?
Which agent are they using?
By spending enough time looking at a property online you should be able to pinpoint reasons why buyers are not flocking to buy it.
By understanding the reason why properties don’t sell in your immediate area this will give you some idea where you need to pitch your own house from both a description and pricing point. You should then be able to reasonably answer the question how much is my house worth?
How to use intelligent house price tools
Thanks to some clever coding, there are now a number of specialist property websites that offer far more than just sold property prices. These offer fascinating insights into both the history and immediate environments of a property. The best site we know of for providing this data is:
Property Detective (paid for on a ‘per report’ basis). This site can provide high-level information on a wide range of local factors including:
Leisure facilities and essential retail destinations
Walking and driving distances to local schools and amenities
Local travel information
Potential nuisances including noise, smells and flight paths.
Having a detailed insight into the local area can be a powerful thing. It certainly can’t hurt to have all of this information at your fingertips. It should help answer any burning questions you have and may even bring things to light that you hadn’t considered before.
How to sell your property when speed of sale is most important
If all you want is a quick house sale with a greater degree of certainty there is another way of selling.
Examples of when you may want to sell your house fast include:
Sale of an investment or rental property (with or without tenants)
Sale of an inherited house
Sale of a property following divorce or separation
When a house sale has fallen through as a result of your buyer pulling out
Selling quickly to pay off debts or loans
Selling a property fast can be likened to selling a car fast. The only difference is the numbers are just greater. You’ll no doubt have heard of car buying firms like webuyanycar.com These companies will offer you a cash sale in exchange for a quick purchase of your car. You’ll receive less than the full market value but in return you’ll have a more certain sale. For cars it’s almost an immediate transaction as there’s little paperwork to do. And there are firms that buy houses fast in just the same way albeit this takes longer due to the paperwork involved.
Specialist property buying companies will offer to buy your house from you quickly at a discount to the full market value. Typically, they pay between 75 – 85% of the value of your property. In some instances, they’ll pay as much as 90% of the value but this generally only applies to higher value properties. Today property buyers offer a number of different routes to help sell your house quickly. These include:
Direct Cash Purchase
Put simply, a cash purchase is where a property buying company buys your house directly from you. Importantly, they do not require mortgages like regular house buyers. Instead, reputable house buying companies will have substantial cash resources of their own as well as access to substantial external funds. Depending on how many properties they are buying, they’ll combine the use of both of these routes. Cash purchases are by far the quickest route to sell your house with sales typically completing in just 28 days or less. This is particularly good news if you are facing any financial hardship or just want a very quick sale for any reason.
The assisted sale route works by the property buying company introducing a pre-qualified investor to buy your property. The investor will have already been vetted by the house buying company as being ready to proceed. Selling your property via the assisted sale route will take longer than the cash buyer route. This is because the investor will need to arrange funding and carry out detailed searches for their lender – just in the same way as a regular buyer. However, using the assisted sale route you can still expect your house sale to complete in under 8 weeks.
On average, assisted sale properties take around half the time it would take to sell a house on the open market via an estate agent.
There’s a lot to consider when trying to work out the value of your own home. This takes both time and patience. But doing so could help you understand how house price valuations are arrived at and most importantly how buyers think.
How to get a free, no obligation, offer for your house today
Getting a cash offer for your house couldn’t be simpler. As one of the UK’s leading homebuyers, we buy properties direct. We also work closely with just a handful of national property buyers by introducing clients to each other. This works particularly well as each of us have our own preferences in the locations and types of properties we buy.