By Property buyers and sellers could be losing hundreds of thousands of pounds due to ‘old fashioned techniques’ used to measure floorplans, according to a new report from Spec, a property-technology company.
In a recent report titled ‘Risks and Costs of Mismeasurement in Residential Property’, Spec claims some London properties are being mis-sold by almost £34,000 due to methods currently employed by estate agents to value properties.
As many as 73 per cent of properties surveyed by Spec included rooms with irregular floorplans, which estate agents may struggle to measure accurately, when using older measuring methods. Such floorplans are crucial for ultimately determining the overall value of property, according to Spec.
Putting discrepancies into perspective
If the average UK property costs £300,000 and measures 1,100 square feet in size, a 10 per cent discrepancy in floorplan measurements could equal a property valuation discrepancy as high as £33,000, according to Spec.
This matters, as homes in areas of high value, such as London, risk greater potential price discrepancies. Discrepancies were found across all properties resulting in an average of 54 square feet, which is enough space to fit a small study or storage space, according to the recent report form Spec. However, average discrepancies rose to 92 square feet, when data was isolated just to houses, which is enough room to fit a study or even a small bedroom.
Significant discrepancies to value
The average UK home is mis-measured by £22,344, with a maximum discrepancy of £134,580, according to Spec.
Also, the typical London home is mis-measured by £57,697, with one of the most extreme London house mis-measurements resulting in a discrepancy of £347,505.This is significant, as the Office of National Statistics claimed in its latest House Price Index report that the average UK home was worth £230,776 in December 2018, while the average London house was valued at £473,822 over the same period. These figures could be subject to change if they factored in the room for value discrepancies.
Both buyers and sellers lose out
The survey discovered that mistakes with measurements resulted in 60 per cent of properties being over-stated, something that risks making buyers and renters over-pay on new purchases. The remaining 40 per cent of cases resulted in an under-stating of value, putting landlords at a disadvantage when they ultimately decide to sell.
A ‘hidden scandal’ in the UK property market
As many as 1 in eleven properties displayed measurement discrepancies as high as 10 per cent, according to the recent report from Spec.
Anthony Browne, special advisor to Spec, believes that the findings are concerning, and could put potential buyers out of pocket unnecessarily. “This is a great hidden scandal in the UK property market,” he claimed.
He added: “It is ridiculous that when you buy a pint of beer or a pound of sugar you know exactly what you are getting, but when you buy your home, you don’t.” Speaking about accurate measurements, he concluded: “Previously that was technically difficult, but it is now quick and affordable to provide highly accurate floorplans, giving buyers and sellers peace of mind about the true size of property.”
Room for improvement
To conclude their findings, Spec laid out a series of recommendations for agents to consider, including the suggestion that they ensure best practice and confidence in the services and systems they provide, as well as avoiding any legal or commercial risks to themselves and the work they carry out.
Potential buyers should also be active in ensuring that they question floor plan providers on the information they collect, and that measurements are carried out to certified standards, according to Spec.
Comments