Table of Contents
- How Much Is My House Worth?
- How can you estimate the value of your home?
- House Value FAQ
- 3 tips on setting a selling price for your home
- Factors which affect the value of your home
- Why is it important to estimate the value of your home correctly?
How Much Is My House Worth?
Find out your house value
If you are asking ‘how much is my house worth’ you are not alone, this is one of the most common questions from homeowners in the UK property market. Estimating how much your house value is extremely difficult and you are probably not in the best position to judge. This is because it is almost impossible to be objective about your own home as you have probably invested a lot of time and money into making it reflect your personal tastes. Instead a pragmatic approach is required to determine your house value.
Despite your emotional attachment to your home, property is an asset like stocks and shares. As a result, its value can be affected by slumps and booms in the marketplace. At best, how much your house is worth is a combination of timing (when you decide to sell), a consideration of the house’s characteristics (such as its size and location) and guesswork. The simplest answer to this question is that the value of your home is determined by how much a buyer is prepared to pay for it.
How can you estimate the value of your home?
The most accurate way to work out the value of your home is to use a variety of different resources such as: the UK House Price Index, tools on online property websites and local or online estate agents.
The UK House Price Index
The UK House Price Index lists the average prices of property sold in the UK according to county or region and breaks it down according to property type (such as detached, etc.) It can be invaluable in giving you a starting point in estimating the value of your home. The only problem is that data can be at least a month out-of-date as it takes time to upload the details of every house purchase. Another thing to bear in mind is that the average price does not take into account regional variations. No county or city has uniform neighbourhoods where property prices are all the same.
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House valuation tools on online property portals
Most property-based websites have a tool where you enter your postcode or address with some basic information about your home. Using this information, the tool will search its database and give you an estimation about how much your home is worth. This is handy as a rough guide but not always very accurate. The parameters used by such tools are quite basic, and it cannot always take into consideration very real human factors that make your home unique or worth more. For example, being in the catchment area of a good school or any renovations you have made.
Consulting estate agents about your house value
Both local and online estate agents can be helpful in setting a price for your home as they are property experts. However, they are also hoping to be hired by you and make money from the commission. It is quite possible that estate agents will overestimate the value of your home so that you will instruct them to market and sell it. Using a local agent is probably the best bet for finding out your house value as they will be familiar with other similar properties in your local area.
House Value FAQ
What is the fair market value for my house?
The FMV (Fair Market Value) is what price a buyer is willing to pay for property. This price can be affected by seasonal factors (such as when you put property up for sale), the economic climate in the UK when you sell and facts about the property itself such as what type of property it is, its condition and location.
When is the best time to sell my home?
Research has shown that the best time to sell is in spring. Would-be home buyers have recovered from the excesses of the Christmas season but are not yet thinking about their summer holidays. Also, allowing for the delay in selling their own property and making the arrangements to finance the purchase, they will be ready to move into their new home in autumn when children start school.
How much can the value of my home vary?
Up to 20%-25% depending who you consult. It is in the best interests of an estate agent to quote a high sale price. On the other hand, the evaluator of the potential buyer’s mortgage lender may underestimate the value of your home to protect their investment.
How much is my house worth?
The answer to how much your house is worth depends on a large number of factors, but to get a general idea of your property value, try looking at similar properties for sale in your local area. Make sure when obtaining an estimate that you never depend on one figure from a single source. It is quite common to receive various values, sometimes with quite sizeable differences. You also have to allow for other factors such as how much people are willing to pay. In some cases home buyers with pay 20%-30% more than the survey value of the property if they are eager to purchase it.
3 tips on setting a selling price for your home
1. Use multiple sources to value your house
Never trust one resource when judging how much your house is worth. Visit several property portals and ask at least three estate agents in order to be as accurate as possible.
2. Do your research into local house prices
You know your property and neighbourhood the best. As well as using different resources, do your own research and see how much other properties have been, or are being sold for, near to you.
3. Calculate an average house value
Although it might be tempting to go for the highest house price quoted, make an average of all the prices given to come up with an objective number.
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Factors which affect the value of your home
The factors which affect how much your home is worth can be divided into two categories: the characteristics of the property itself and its location.
The characteristics of the property affecting house prices:
- The type of property
- Size (footage as well as number of bedrooms)
- Age and condition of your property
- Structural integrity of the property
- The layout of your home
- The size and condition of the garden
- The inclusion of a garage or parking
- Extras such as outbuildings, a conservatory or adjoining land
- Whether your home is a listed building or not
Factors about your property location affecting house value:
The proximity of facilities which influence property price depend on the needs of the potential buyer but include:
- Amenities like shops, restaurants, etc.
- Being in the catchment area of a good school
- Demographic composition of the neighbourhood
- Any planned local regeneration plans
- Transport links
- Crime rates in the local area
Why is it important to estimate the value of your home correctly?
One of the reasons that it is important to set the right price for your home is for your own peace of mind. It may be the place where you have spent many happy moments, but a house is also an asset. You deserve to see a good return on your investment. The price must reflect how much time and money you have spent maintaining and improving the house. For example, refitting the kitchen or bathroom.
Another reason for correctly estimating how much your house is worth is the sale ability of the property. If you set the price too high, you might have to drop it later. Potential home buyers will see that the house has been on the market for a long time and then see that it has been reduced in price. They will naturally assume that there is something wrong with it so it could scare off potential buyers.
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