How to accurately value a home in 4 easy steps

Get the most accurate valuation of a property you own or intend to buy or sell - without spending any money on a professional valuation.

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House prices graph

Step 1 - Check historical sold prices in the area

A property is ultimately worth what someone will pay for it.

However, recently sold house prices for similar properties in the same area are the first step when valuing a property.

The selling price of every property sold in England and Wales is recorded at HM Land Registry (HMLR).

Once a conveyancing solicitor has completed the conveyancing process, the sale information is formally registered at HMLR. This data is a great starting point when valuing a property.

HMLR records are a 'lagging indicator' of property prices, however, as there are often 3 - 6 months between offer and registration. HMLR date is in effect a record of agreed sale prices from 3 - 6 months in the past.

Try our free to use house price checker to find the sale price recorded at HMLR, for any property sold in England or Wales:

House price checker

Tips for using the house price checker:

  • Search for recently sold similar properties sold on the same street
  • Search comparable streets if or the immediate locale if there were no properties sold on the same street in the last 6 - 12 months.
  • If your search returns no results, search over a longer time period

Step 2. Apply the most recent % change in value

The House Price Index is a set of data published by the Nationwide which gives a more up-to-date picture of regional price variation.

This data is more of a 'leading indicator' of house prices as it is based on mortgage valuations rather than HMLR registrations. As a result, the data can be 3 to 6 months ahead of HMLR.

The data is not as granular as it is only compiled on a regional basis. It is nevertheless a good indicator of general market movement in the area.

The index shows monthly percentage house price changes. If you are unable to find a recently sold property on a comparable street, find a property sold further back in time using the House Price Checker, then apply the monthly percentage increase for the area.

Check the Nationwide House Price Index

Step 3. Adjust for factors that affect a property’s value

There is a variety of factors that affect the property’s value.

For example, school catchment areas can have a big impact on prices, and the catchment area perimeter will often run between two properties. Other local area factors include:

  • Local crime rates
  • Risk of flooding
  • Local transport links
  • Local amenities

In addition, there are a number of things to consider about the actual property when assessing its value:

  • Tenure - freehold properties will be worth more than similar leasehold properties. Share of freehold properties are usually worth about the same as freehold properties.
  • Length of lease - if the property has a short or relatively short lease, this can have a significant impact on the value of the property (see: Should I buy a property with a short lease)
  • Modifications to the home – has the property been extended, had the loft converted or been renovated?
  • Condition of the property - is the roof in need of repair, are there concerns over subsidence etc.?
  • Decorative order
  • The layout of the property - e.g. number of bedrooms
  • Size and condition of the garden
  • New kitchen or bathroom?
  • Position and view - does the property have a special view?
  • Windows - what is the appearance and condition of these? Is there modern double glazing throughout?
  • Energy efficiency - solar panels, for example, can add value (see: What to check when buying a house with solar panel)
  • Risk of flooding - has the property ever flooded or is it at risk of flooding? (see: Are you about to buy a home at risk of flooding)
  • Central heating - What fuel type does it use? Does it work? Is it serviced and up-to-date? (see: How to avoid buying a house with costly heating problems)
  • Conservatory or garden building - these can add significant value
  • Are there any legal issues - e.g. concern over the legality of a roof terrace or an extension?

Once you have estimated the impact of any of the above factors you should have an idea of the property's current value.

From here you can cross-reference your calculation with third party valuation.

Step 4. Get an independent valuation

Get an online valuation

There are various online valuation tools, such as Zoopla, that offer a specific valuation on your property. Most of these tools refer to HMLR data. The key objective of these tools is usually to generate leads that can be forwarded to estate agents.

Get a valuation from an estate agent

In theory, this approach should give you the most up-to-date valuation of a property. Estate agents are on the coalface and have a broad perspective of the property market - from offer to completion.

However, when valuing a property estate agents are primarily focused on signing you up as a client. Estate agent valuations can differ considerably. Overvaluing a property, for example, is a common tactic used to get your business.

See:

Estate agents' tricks of the trade

The best approach is to obtain three or four valuations and take an average. If one of these valuations is wildly different from the others, you should consider disregard it when calculating an average.

If the agents' valuations are significantly different to your estimated valuation, you should ask them how they can substantiate their valuation.

Independent surveyor valuation

If you need a valuation that can be legally relied on, for insurance purposes or when buying another party’s share in a property, you could get an independent professional valuation from a RICS surveyor.

The surveyor will give you a professional valuation that is not commercially compromised by a desire to handle the sale of your property. As such a surveyor’s valuation is objective and independent.

A RICS valuation will cost around £150.

Your next step

If you are buying, selling, remortgaging or transferring equity in a home, we can help you find an expert conveyancing solicitor.

We work with a panel of specialist conveyancing solicitors to deliver a stress-free moving experience.

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  • CQS-accredited panel solicitors
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Gaynor Haliday, Legal researcher

Author:
Gaynor Haliday, Legal researcher