How Accurate is Zoopla’s Valuation?

Founded in 2007, Zoopla is now the UK’s second-largest property portal (after Rightmove).

Over the years, its property valuation tool – How Much is My Home Worth? – has become a ‘go to’ for sellers, buyers and the curious looking to get an idea of where things stand.

In this article, the team at Property Solvers explores how accurate and reliable the data presented really is.

Zoopla’s Online Valuation

Zoopla uses data sources from HM Land Registry (England and Wales), Registers of Scotland, Ordnance Survey, the Royal Mail’s postcode database and Google Maps.  These are all completely non-bias and legitimate.

This figure is automatically generated behind the scenes by Hometrack – a residential data research company (owned by Zoopla itself).

To start, the algorithm takes the following into account:

• Sold house price data (from the HM Land Registry or Registers Scotland)
• Changes in the market value of properties up for sale and sold closeby
• Local and national trends;
• The property’s type (terraced, semi-detached, detached house or flat)
• Size of the property
• Number of bedrooms
• Previous house sales price(s)
• Recent asking prices in the surrounding neighbourhood(s)
• Information on the local area such as proximity to schools / essential amenities and crime rates

It then uses a multiplier based on what neighbouring properties have achieved to produce the estimate.

Zoopla’s Valuation Accuracy

The answer to the question of online valuation accuracy depends first and foremost on the type of valuation you go for.

Zoopla does not make money from the sale of property, but rather from listing fees and other services they provide to estate agents and auctioneers.   

For this reason, they have no vested interest in your individual property sale.  They would not directly benefit from providing you with an inflated or underestimated value.

However, when you select an “instant valuation”, you’ll need to accept that the generated figure is going to be broad.

Controversies with Zoopla’s Online Valuation Accuracy

We often see that some of the house valuations provided by Zoopla are over or underestimated.  Indeed, there have been reports of the differential being up to 50%.

However, it wouldn’t be fair to entirely blame Zoopla.

The problem is that the UK property market landscape is wide and varied.  Particularly in bigger cities, it’s common to see expensive homes within a stone’s throw of lower-valued flats.

There are also many quirky or unusual properties all over the UK.  Bungalows, for example, are often smaller than other properties but can fetch a higher price.  Buyers are often willing to pay a premium because of the greater privacy and accessibility (compared to a terraced house or flat, for example).

Combined with this, the algorithm is not accounting for a range of variables involved in the property valuation process.  In our experience, this often comes down to condition and, crucially, whether there are issues with the property.  For example, it would be impossible for Zoopla to factor in whether a property needed decorating or full renovation.

There are subjective factors involved too. One buyer may love certain characteristics of a property and be willing to pay more than another.

Furthermore, there may also be a lack of recent sales data which means that any price estimation becomes too generalised.  Say, for example, your property last sold 20 years ago and there have only been a handful of sales on your street since.  There are simply not enough data points to produce something reliable.

In short, there is always the potential for a property to sell for less or more.  Until an industry professional has made a physical visit to your property (and closely analysed its condition / possible detracting factors), there’s always going to be a degree of ambiguity.

Should You Bother with Zoopla’s Online Valuation?

Yes, absolutely – but with a good pinch of salt.

Some go as far as to say that having this kind of valuation tool is irresponsible – particularly as a house is the largest transaction that most people will make.  Whilst this is probably extreme, Zoopla has effectively made it the job of estate agents, auctioneers and home buying companies to show the reality to sellers.  As industry professionals ourselves, this can be a tough task at times.

There’s also a psychological factor at play here.  Letting go of the concept of a higher price is difficult – even if it isn’t based on real facts.

Zoopla has defended its position saying that it is not a formal valuation.   They have also pointed to their English and Welsh estimations being more accurate compared to Scotland.

Our View on Zoopla and Valuing Properties

Our view is that inaccurate valuations are not necessary due to Zoopla – but the company should perhaps be more clear that the tool provides indicative estimates only.

Indeed, while an instant valuation may be a useful way to find a ballpark figure, a much greater degree of accuracy may be achieved when opting for an estate agent / buying company / auctioneer valuation. 

Not only will you be able to specify details of your property such as its condition and age, but you will also have the opportunity to compare figures from a number of specialists to find as accurate a number as possible.

However, it is still worth comparing a number of opinions from different agencies if you do this.  Comparing a number of estimates will help you to rule out the more flattering figures and draw an unbiased and genuine conclusion.

While most property specialists keep their estimates as accurate as possible, the temptation is there to slightly inflate the figure to attract potential sellers with the “promise” of a great profit.

Moving forward, we’re excited to see ongoing advances in machine learning and artificial intelligence

Property Solvers’ Valuation Process

Here at Property Solvers, we pride ourselves in taking the time to provide clients with detailed information regarding the valuation process.  We start by asking questions regarding the condition of the property.

As well as examining property sizes and sold price data, we use our many years of refurbishing and developing properties to forward one of our free 10-page valuation report.  We can then confirm the suggested asking / sale price once one of our viewing experts visits the property.

We also have access to ZooplaPro – an excellent tool (available to estate agents and auctioneers) that has a range of useful data not available in the public domain.