Valuation of a flat

aroominyork

I am selling my father’s flat in London, a top floor penthouse in one of four adjoining seven storey blocks. The estate agent estimates it around £1.3m, maybe £1.35m, before the Brexit blues hit. He has received an offer of £1.22m which he thinks is good.

An identical flat in one of the other blocks sold in January 2011 for £960k and Zoopla today estimates it (and also one of the other identical four penthouses) at just over £1.6m. Given house price inflation in London from 2011 to 2018 of c.65%, that also upgrades £960k to around £1.6m. So that is a difference of around £250m from the agent’s estimate in a strong market.

What else should I take into account to interpret this discrepancy? We are in no hurry to sell and the most likely buyers are downsizing and may be waiting to see how the market moves before potentially under-selling their current houses.

Thanks.

Slithery

Ignore Zoopla.

need_an_answer

If the offer is acceptable to you,then accept it.If not don't.

far more things to consider like the running and management costs of something especially if you are in no hurry to sell. on a premium property i'm guessing that all things are relative and they are a premium price too...

If its a niche market (in as much as there are not viewers queuing up to look and offers may be few and far between)then IMO you need to consider the offer in the terms of what it means to you,not how property prices have /should perform on a sliding scale and something as generic as zoopla or mouseprice or righmove or on the market.....

davidmcn

aroominyork wrote: »

What else should I take into account to interpret this discrepancy?

You should take into account that Zoopla is (broadly speaking) applying very rough, regional averages of house price movement to registered sale prices - nobody from Zoopla has viewed any of these properties or is trying to make allowances for the market in your street. And registered sale prices are going to be at least six months behind the current market, so aren't going to reflect any current jitters among buyers.

SmashedAvacado

if you accept an offer now, you're not underselling if the market moves up - you're selling at the market price on a given day. Its worth what someone is prepared to pay for it - and that segment of the market is not flush with activity at the moment. It really depends on what else you are going to do with the money.

AnotherJoe

Tell the buyer he's made a mistake and that Zoopla says its worth £380,000 more, so thats your new price.
Alternatively, decide that Zoopla estimates are a pile of cack and sell it for what the market will bear, which at a guess I'd say is roughly £1.22M.

SouthLondonUser

aroominyork wrote: »

Given house price inflation in London from 2011 to 2018 of c.65%, .

Where does this figure come from? Does this take into account that, since the 2015-2016 peak, prices in most London areas have, at best, stayed flat, and, at worst, lost a good 20% (e.g. some parts of Fulham and Chelsea)?

What's the area? How many other flats are there on sale nearby? Is it one of those newish riverside developments? How many British vs non-British are in the development? Some modern developments tend to be liked by foreigners more than by local, so are hit by Brexit uncertainty more than a traditional terraced house with a garden and close to a primary school.

SouthLondonUser

Also, what's the alternative? I.e. is your father living there at the moment? Is the flat just an investment?

jonnygee2

and Zoopla today estimates it (and also one of the other identical four penthouses) at just over £1.6m.

In my block there are 20 flats, the top 10 (including mine) are all near identical layouts (perhaps an external door has been moved etc). Some are a bit nicer inside than others but these are 65sqm flats, so a full refurb would be <30k.

Zoopla estimates the one at the end at £260,000k, mine at £380k, and the one next door at 420k. That's a 60% difference.

Lesson learned = do not worry about Zoopla valuations.

Crashy_Time

https://www.msn.com/en-gb/money/news/brexit-blues-hit-house-prices-in-almost-every-london-borough/ar-AABAO00?ocid=ientp

SouthLondonUser

https://www.msn.com/en-gb/money/news/brexit-blues-hit-house-prices-in-almost-every-london-borough/ar-AABAO00?ocid=ientp

According to property-website operator Rightmove, all but two of London’s 32 boroughs have seen asking prices drop in the past year as Brexit uncertainty continues to bite in the capital.

That's hardly the most relevant metric, though.
The two things which are relevant are:

• how many properties were sold in one year vs the previous years?
• how have actual transaction prices changed? Not asking prices, actual prices