How does zoopla house valuations work?

daivid

Having followed the Zoopla estimates for my own house and the houses nearby I'm fairly sure the bulk of the zoopla estimate data is comprised of the previous sale price and the local sale prices. As already said they have no idea of the condition of a house, nor if it has been improved (or ruined). I believe Zoopla estimates are likely to be much more realistic where lots of nearby houses are similar if not identical and where a house has changed hands fairly recently. Where there is greater variation and/or the last sale was long ago more salt is needed!

Rightly or wrongly the time since the last sale seems to skew the value. My house and those of my immediate neighbours make up 4 pretty much identical houses in terms of sq m, garages and plot size. As I bought most recently mine is 'worth' most, whilst the neighbour who has been there almost 50 years has a house 'worth' considerably less. I think if the 4 went on the market at least 3 would achieve similar prices (one has significant internal changes).

What I will say in defence of zoopla is that a figure picked a 1/3 of the way up their estimate (put me into a good ltv) was accepted by the bank for remortage. Whether that shows that zoopla are not totally out or that the desktop valuations banks do are just as bad I have no idea.

ka7e

daivid said:

Rightly or wrongly the time since the last sale seems to skew the value. My house and those of my immediate neighbours make up 4 pretty much identical houses in terms of sq m, garages and plot size. As I bought most recently mine is 'worth' most, whilst the neighbour who has been there almost 50 years has a house 'worth' considerably less. I think if the 4 went on the market at least 3 would achieve similar prices (one has significant internal changes).

My experience is the opposite. I bought my house at a knockdown price as it needed complete modernisation. Now although fully renovated it's valuation is substantially lower than my neighbours - none of which have been on the market in the last 15 years. Zoopla does not take into account any improvements or extensions when deciding on a price. Prices for the whole road are skewed low as the first 20 houses are terraced and they are the ones that change hands regularly. The top of the road is semis and detached and people tend to stay in them for years.

TBagpuss

Like others, I take the view that they are totally unreliable.

I think they are based on what other local properties sell for, pegged to what the specific house last sold for.

I have a 3 bed semi. A couple of years ago, according to Zoopla, it went up by about 70% overnight.
This was just after the (Admittedly lovely) old vicarage just up the road sold for £1.7M. 

The Zoopla value has since gone back down to a more believable figure, but this suggests to me that their system doesn't allow for differences in type / size of properties - so I think at some level it's a case of 'average sale price for properties in this postcode area is" which may mean you get fairly accurate figures if you are in the middle of a large housing estate of identical properties, but not so much anywhere else.

It is also linked to the last price your property sold for - I assume they start with that an apply a % increase based on local prices.

For instance, my house is valued by Zoopla at a lower price than my attached neighbours. They bought a newly renovated house, I bought a house which had had no work done for at least 20 years, and had a fair bit done when I moved in. 

I suspect if properly valued, they would be pretty much exactly the same.

ReadingTim

It looks like they apply the average percentage price change of the local area to the last sold price of the property to come up with the new figure. 

Whether it's further refined, I don't know, but the crude starting point seems to be that last sold price, of which they don't know the context - for example whether it was sold at a knockdown price because it needed a complete refurb, was the last plot on a completed estate, or the couple were divorcing/had died and wanted a quick sale... 

You could probably use it to pick your lottery numbers for the week, but as a tool for house price valuation and especially one on which to base offers, you're generally laughed out of town by giving it the time of day.  

daivid

ka7e said:

daivid said:

Rightly or wrongly the time since the last sale seems to skew the value. My house and those of my immediate neighbours make up 4 pretty much identical houses in terms of sq m, garages and plot size. As I bought most recently mine is 'worth' most, whilst the neighbour who has been there almost 50 years has a house 'worth' considerably less. I think if the 4 went on the market at least 3 would achieve similar prices (one has significant internal changes).

My experience is the opposite. I bought my house at a knockdown price as it needed complete modernisation. Now although fully renovated it's valuation is substantially lower than my neighbours - none of which have been on the market in the last 15 years. Zoopla does not take into account any improvements or extensions when deciding on a price. Prices for the whole road are skewed low as the first 20 houses are terraced and they are the ones that change hands regularly. The top of the road is semis and detached and people tend to stay in them for years.

Not sure how that makes your experience the opposite. Whilst you've bought more recently it was for a low price and zoopla knows this. The (low) recent price heavily influences the valuation in my belief, so unless the neighbours also bought at knock down prices your experience more or less ties in. I should perhaps have clarified that AFAIK all three houses of the four were last sold in broadly similar conditions. I think you are right on average sales for the locality feeding in, and I don't think Zoopla always fully take into account (or know) about different types of houses.

ka7e

Not sure how that makes your experience the opposite. Whilst you've bought more recently it was for a low price and zoopla knows this. The (low) recent price heavily influences the valuation in my belief, so unless the neighbours also bought at knock down prices your experience more or less ties in. I should perhaps have clarified that AFAIK all three houses of the four were last sold in broadly similar conditions. I think you are right on average sales for the locality feeding in, and I don't think Zoopla always fully take into account (or know) about different types of houses.

For clarity, I mean that my neighbour's houses haven't been modernised in the past 20 years, nor have they changed hands. Yet according to Zoopla they are valued at £30-50k more than mine. An expensive house has just had it's selling price entered from Land Registry and surprise - all the houses in the road have suddenly increased in value!