Why are some houses listed as being sold for far less than they actually were?

thor

I have a friend who bought his house in 2004 for over £400000. He says that he bought outright with no mortgage and it is a big house in a well to do area.
Recently I have been searching for houses in that area so decided to check the 'sold' prices there using nethouseprices.com.
It reports that the house was sold for only £36000 and I have seen such anomalies many times in these house price databases. So I would like to know under what circumstances are houses listed being sold for a fraction of the price they actually went for? Is it anything to do with mortgages or buying a share of the property, part exhanges etc? Bear in mind that my friend had no relationship with the previous owner and has not swapped properties either.

Linton

thor wrote: »

I have a friend who bought his house in 2004 for over £400000. He says that he bought outright with no mortgage and it is a big house in a well to do area.
Recently I have been searching for houses in that area so decided to check the 'sold' prices there using nethouseprices.com.
It reports that the house was sold for only £36000 and I have seen such anomalies many times in these house price databases. So I would like to know under what circumstances are houses listed being sold for a fraction of the price they actually went for? Is it anything to do with mortgages or buying a share of the property, part exhanges etc? Bear in mind that my friend had no relationship with the previous owner and has not swapped properties either.

Possibly if only part of a house is sold. One example I know of - a husband and wife owned a house as tenants in common. When one died the other bought the half house from the executors. This is recorded as a sale for half price.

Senior_Paper_Monitor

'The system' is supposed to filter out such things in order to avod them affecting statistics and individual valuations using (as pretty much all do) comparables.

In my experience not always the case - but there is a chap floating around this forum who represents the Land Registry and is very helpful (as are the whole Land Registry team in my experience). I'll be very interested to hear what he says about this particular issue.

mah_jong

yes that is what has happened to a house I partly own. My sister sold to my husband and the value of the sale is just that amount - I was miffed when I saw it as it looks like the cheapest house house in the area.

If the listing had said half the property it would have been OK.

(Scotland)

hcb42

thor wrote: »

I have a friend who bought his house in 2004 for over £400000. He says that he bought outright with no mortgage and it is a big house in a well to do area.
Recently I have been searching for houses in that area so decided to check the 'sold' prices there using nethouseprices.com.
It reports that the house was sold for only £36000 and I have seen such anomalies many times in these house price databases. .

perhaps the friend didnt tell you the whole truth, or approximated, my neighbour reckons he paid about £200K more than he did...!;)

I have always found nethouseprices spot on correct.

mah_jong

hcb42 wrote: »

I have always found nethouseprices spot on correct.

Just had a look there and it does not apply to Scotland.

Should I take the matter further as the sale price is half the value of the house on zoopla and ourproperty? Indeed, it looks cheaper than the small flat that sold a few months previously!

Who do I contact?

Gromitt

My next door neighbour had a similar problem. His wife moved out and he had to take a mortgage out for 50% of the value of the house. The house was valued at 140K and 70K was noted on the land registry (and every house price checker website I've used).

It was amusing for my other neighbour who is trying to currently sell their house. Apparently someone visited and said "It's a nice house, but it can't be worth 130K as a house 2 doors up only fetched 70K and looks the same". He laughed and pointed towards the front door.

barrowc

mah_jong wrote: »

Who do I contact?

Not 100% sure but you could try giving Registers Of Scotland a call - details at http://www.ros.gov.uk/customerservices/index.html

Land_Registry

Senior_Paper_Monitor wrote: »

'The system' is supposed to filter out such things in order to avod them affecting statistics and individual valuations using (as pretty much all do) comparables.

In my experience not always the case - but there is a chap floating around this forum who represents the Land Registry and is very helpful (as are the whole Land Registry team in my experience). I'll be very interested to hear what he says about this particular issue.

Our House Price Index (HPI) and price paid information (PPI) include data on all residential property sales in England and Wales that are sold for full market value and are lodged with Land Registry for registration.

As Senior Paper Monitor states the system is supposed to exclude a variety of transactions which would distort the figures as the main purpose of the data is to compare 'like for like' and thus avoid the variations to which the OP has referred.

For example a Transfer between joint owners to just the one i.e. a share in the property should not be included in the data. Likewise a commercial property e.g. factory/office or a sale of part of a property e.g. garden ground for development.

A full list of current exclusions from the data can be found on our website.

The data is added manually at the time of registration of the actual Transfer (sale). It would be churlish to suggest that errors are not made when either including the wrong data or excluding the right data but in the vast majority of cases the data is correct.

If an error is spotted, and they can often stand out like a sore thumb as suggested by other posters, then we can amend the error once advised - you can report an error in our sales record via our website.

thor

Well he definitely bought the whole house as it is only his family who has moved in with him. The previous owners did not stick around.
I checked house sold prices around his area and it really does 'stick out like a sore thumb'.
He paid £36000 in 2004 for the house which had been previously bought for £71000 in 1995. This period more or less covers nearly the whole house boom era we have just had before the crash but it almost halved. Also a similar house just a few doors away and also bought in 2004 went for £360000(which is close the price my friend told me he had paid).
I don't think he knows the Land Registry has his house down as so cheap but I will tell him and suggest he contacts them to rectify the error.

Dave_Ham

Age old my Dad is bigger than yours...

Whilst there are anomalies there are not loads to be fair. I would suggest you asking him outright and him potentially be "found out" will be more of an issue that if it was recorded wrong.

Still you know your friend better..

Good luck