How reliable are Zoopla house price estimates?

[Mackerz]

Looking for some advice as I’m about to start house hunting.

Sold flat in central Manchester in September 18, thought we’d bought a house but the purchase fell through. We decided to rent for a bit - to get a feel for the suburb we wanted to live in, Christmas and then Brexit round 1 (March 2019) were approaching and nothing much was going on the market. We’ve decided to start looking again now as we’re hoping that Sept/Oct will see an influx of houses (I know Brexit round 2 is approaching so that may stop people putting their houses up for sale but no harm in looking).

I’ve had a look through zoopla at some of the houses I viewed last year and Zoopla is estimating their prices at 15-30k less than they sold for in September / October 2018. I’m looking at the 320 - 350k mark for a 3 bed in a niceish area of Manchester.

Are Zoopla estimates reliable for houses that sold recently (so they have a recent price from the land registry), are Zoopla predicting house price drops? What does everyone think, should we leave it a few months and see what prices do?

I think with Zoopla, the prices are based on market fluctuations - using the last sold price and tracking current value based on what's happened in that area since then.

Obviously, though, if someone has ploughed some money into redecorating/upgrading a property, this wouldn't be reflected in the estimate they list. I think this is why they offer the opportunity to fill in more information about a property to get a more accurate picture.

Thanks @noway

They were all houses that were ok but needed a bit of cosmetic updating, so a 20 year old kitchen you could live with but would need replacing within 5 years, for example.

We viewed 8 properties and had an offer accepted on one (that fell through, sigh). I’ve found 5 of them on Zoopla as having sold in the final quarter of 2018 and Zoopla has reduced the value of all of them.

I think Zoopla’s estimates are more reliable if the property sold recently as they have an actual, recent sold price to go off. Then as the poster above said, they have some kind of algorithm that works out an estimate based on other sold prices of similar houses in the same area. Interesting that it’s dropping that much in Manchester too. It’s about 4-8% based on the figures you’ve given above.

A lot of uncertainty this year around Brexit though, so a good proportion of would be buyers are possibly holding off to see what happens.

i think it just uses nationwide house price index and their own data to come to a price.

If your street is slow turn over. All different houses or widely different condition it will show up some odd balls.

It won’t take into account if the house was a dump when it was last sold. Equally it won’t take into account the neighbours who grow Japanese knot weed for fun and a developer has planning permission to put a waste facility next to your house.

It will also take the data of the area or street as a whole. For example period properties in my city go up a lot more in value than more modern houses due to lack of supply. Zoopla is always under valuing period homes in my city as I assume the data is taken as a whole postcode.

Another good example is there is a street by me full of amazing 8 bedroom Victorian villas which are now all in a conservation area. There is a good 30% difference in price if your attached neighbour was converted back In the 80s to studios or a smaller difference if your neighbour is 3 luxury flats or a nice big premium if your attached neighbour is all 1 house. Talking half a million difference. Zoopla would be useless in that street.

It depends if the house has actually very recently been sold, or if it’s an estimate. There could be literally hundreds of thousands of pounds difference with literally an almost identical 3 bed house in the same street, depending on what’s been done to it. I wouldn’t trust the estimates at all

They’re all fairly standard 3 bed semis, 1930s ish I would guess. It’s a family area with good schools, prices had been shooting up, until this year. I must admit, I was surprised as I was looking through the figures, I thought the prices would have stagnated, rather than dropped.

I am a bit cautious of buying now, due to Brexit, as someone said above maybe a proportion of people are holding off until we know what’s happening.

My area was on 9% growth this year but has been adjusted down to 4%.

This happened the year before on the previous Brexit deadline and got adjusted back up again. I think the percentages are a bit flexible till new sales come in to prove or disprove their adjustment. I don’t mind if there is a crash. But I wish prices would stagnant for a few decades so borrowers aren’t screwed and the new generation of home owners can get onboard a huge influx of brown field (first ) good quality council houses with no right to buy would sort that out IMHO.

Not reliable at all.

No, not reliable. It seems to calculate 'average values' for the area - I recently bought a place and on Zoopla the price is a LOT lower than the house is worth (it's a doer-upper too).

Not reliable at all, 3 identical houses and over 50k price difference, the most expensive is only 240k..

At the top of the page it will say a percentage trend (the area xxxx has seen a +/-13%) based on local market data. It then takes the last sold price of the particular house number and adjusts based on that. So houses that haven't sold in 30yrs can be wildly different to the mirror image next door, sold twice in 5 years. It's more accurate in an area with a high turnover of property as there's more data to use. Roughly, it is the same valuations a surveyor would use, only they factor in the condition of the property as they actually view it.
I would assume people are holding off selling if there's a downtown, but equally if you find something you like, you'd have an argument for paying less (the bank is likely to value it less in their mortgage application if there's an obvious downtrend in the area based on other houses selling for less than expected). Doesn't mean there's fewer people buying though (competition driving up the price on a particularly good property) so it's kind of swings and roundabouts.

I wouldn't say it was reliable, bought ours this time last year and just checked ... 50k over what we paid and we haven't done any of the renovation yet and in no way is ours worth that!
The next house to us went for 30k more than ours as its in a good ish state and Zoopla is saying its worth 20k less than what they paid!

Not reliable at all. I’m surprised that they are allowed to give such inaccurate estimations without being at risk of legal action. I mean some (not many granted) potential buyers will base offers on their rubbish data which could hypothetically cost people thousands

I had my place valued recently and Zoopla has under valued it by 40%. It doesn't take into account renovation work, just sale prices.

They have at least a three-month lag, so not very accurate. The more unusual the property the less accurate they are as well

They really overestimate. The houses in our street are valued on Zoopla at about £40,000 more than they've actually sold for.

I'm not sure, where I live rhe houses are predominantly very expensive, as in over seven figures, when one big one sells, my house price rises. Some smaller new builds have been built, about six of them, and when they sell the house price drops. So there is clearly some form of algorithm impacting it.

The mortgage company on our last mortgage statement valued it substantially above Zoopla. A nearly six figure difference, so I'm not sure who is right.

Also Zoopla is manipulatable. As in owners can add they have done renovations and have rhe value manipulated up.

I'd say base case it's a rough estimate.

We're in the process of buying a house in a nice suburb of Manchester with good schools (wondering if it's the same one!) and Zoopla values the house we're buying at about £70k less than our offer on it.

I work in property in Manchester and have done for a few years, the market remains really really solid and prices continue to creep up. Not quite at the rate of Liverpool but I think if you come back in 6 months you’ll find you’re getting less for your money.

Here’s one for you. Zoopla have our house listed twice, once with the developer’s name for it and once with the actual postal address. The valuations vary by £227,000.

They also value our neighbours’ house at £148,000 more than the higher price they’ve given ours. The two houses are extremely similar, slightly different in style but the same size and attributes and we both paid the same price within months of each other when we purchased. Bonkers.

Ours is detailed on Zoopla at a price that is considerably more than it is worth, even with the downward adjustment this year. I think if you take an average of all the 6 houses in our road which were built at the same time that looks about right.

A friend who lives in what she considers a rather select little somerset village will have a shock if they sell as property there is just not moving at present and they have all been reduced in value very considerably on Zoopla. With brexit i fear all those lovely independent bookshops and interesting high Streets will be struggling and some people will find themselves stuck in small towns with no bank, post office or independent shops at all the way things seem to be going.

@higgyhog

I’m wondering if Zoopla’s algorithm is taking into account the wider economy too. Thing is, buyers and sellers will just not enter the market and transactions will decline.

www.theguardian.com/money/2019/sep/02/house-prices-could-nosedive-after-no-deal-brexit-says-kpmg?CMP=Share_iOSApp_Other

I found zoopla really inaccurate when estimating for my own road. It undervalued by 30-40%

Zoopla knows nothing about your property, so for example considers some properties in my street to be 3 bed 1bath when they have been extended to 5 bed 3 baths.

We refurbished our property from a poor state and bought it under market value for this reason, so it’s always too low for our house.

There's lots of missing knowledge.

It doesn't know which of the houses on my street have the great view of the park, where there are parking issues, the fact that the house next door can't extend in the same way we have, that my house has a nicer kitchen than next door, or that the posh street behind me has very little bearing on my street, even though we're very close together.

My little terrace of houses is far more comparable to houses a 10m walk away, but it compares us to millionaire's row behind us!