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Why is my property valued £20,000 less than my neighbour's identical bungalow

A few months ago my bungalow was rated £210,000 whilst my neighbour's identical property was £214,000. Now the levels have dropped to mine £184,000 and my neighbour's £205,000 (with no additional improvements to either. Why has the value of my bungalow dropped so much. I am thinking of selling but no way would I sell for such a low rate. The bungalows opposite, with only two bedrooms, you have rated £13,000 more than my three bedroom property.

Asked on Aug 3 2013, House Prices in Droitwich | Report content

Answers (1)

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  • Valuation is not a science. Legally surveyors have a 20% margin of error before mis-valuations are actionable in negligence. The reason why Zoopla throws up some crazies is statistical. Part of the zoopla formula extrapolates prices from average growth in the area. If for example your house was last sold 5 years ago and the identical house opposite was last sold 10 years ago those sold prices act as a reference point. House price growth is not uniform. Your house might rise 25% in value over 2 years but this does not necessarily mean it went up 12.5% per year. This results in anomalies when prices are indexed. The model assumes that a sold price is necessarily the market value. In reality 2 people with identical houses opposite it other might accept different offers for lots of reasons. These valuation models assume those prices to be correct as they are 'sold comparables'. this discrepancy will persist in the indexation model until another sale is achieved or other parts of the valuation model outweigh this anomaly.

    Answered on Aug 5 2013, Report content

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