A ‘third’ of homeowners undervaluing their home by £100k – here’s why | Personal Finance | Finance

House price rises over the past decade mean that two thirds of homeowners, 64%, are likely to undervalue their home. The majority of homeowners who undervalued their property did so by between £10,000-£20,000, a third did so by £100,000 or more, and a fifth by up to £250,000, online estate agent Zoopla has found.

Homeowners in the north of the country were more likely to undervalue their homes, with 81% of homeowners in the North East doing so, compared to 53% in the South East, however, 13% of all homeowners overvalued their home by an average of £47,000, leading to unrealistic expectations and disagreements with estate agents on the asking price.

Of those who disagreed with their estate agent, just 16% achieved what they thought their home was worth and took 60% longer to secure an offer than those who undervalued their home

When asked why the value of their home had increased 33% said the area had become more desirable and 29% said that demand had increased for the type of property they owned.

Those who have owned their home for 30 years or more are more likely to have an accurate idea of its value (31%), compared to the wider average of 22%. This group tends to be more aware of fluctuations in house prices, checking the value of their property an average of four times a year.

There was also significant regional variations, with 81% of those in the North East saying that their home was worth more than they expected.

Scottish homeowners are also highly likely to undervalue their homes, with 78% doing so, followed by those in the South West at 74%.

Percentage of homeowners undervaluing their home

North East – 81%

Scotland – 78%

South West – 74%

North West – 73%

London – 65%

East Midlands – 64%

Wales – 64%

West Midlands – 62%

Yorkshire & The Humber – 60%

South East – 53%

East of England – 44%

Northern Ireland – 41%

Daniel Copley, consumer expert at Zoopla, said: “For most people, homes are their most valuable asset and most homeowners will need the money in future, whether that is to fund their next home or to free up money for retirement.

“While for most it is good news and their home is worth more than anticipated, a significant number have not realised that the house price boom has slowed down and they are overvaluing their property. This can lead to issues agreeing on an asking price with estate agents. But as the data shows, those who go against estate agents’ guidance rarely get what they hope for, highlighting that going with their guidance is the best way to get a reasonably quick offer and secure a sale.“