The Great British Property Gamble
2nd Mar 2008
With the housing market in its most volatile state since the early 90s, 1 in 4 homebuyers (26 per cent) unduly take a huge financial gamble by not bothering to do any comparative research on the current value of homes before putting in an offer. Despite 90 per cent of homeowners saying their home was the biggest purchase of their life, 71 per cent admit they do not even check a property's previous sale price before signing on the dotted line - potentially risking thousands of pounds in overpayment.
Zoopla, the UK's first online property community that combines home valuation tools, sold price information and user-generated content to bring transparency to the property market, questioned over 1,000 homeowners to find out how informed people are when it comes to buying, selling and tracking their properties.
The survey found that more people carry out research on the price of blenders and toasters, cars and furniture than they do on their prospective home with 92 per cent saying they check the price of household appliances before purchase. 85 per cent say they compare the value of cars before buying them, and 78 per cent do the same for furniture, whereas only 42 per cent of people say they thoroughly research house prices before making a purchase.
Despite ubiquitous internet access throughout the UK, over half (51 per cent) say they do not use the web to check property prices with a staggering 40 per cent unaware that previous sold prices, what the neighbours paid and current values are free and easily accessible online.
One in three (29 per cent) also admitted they did no research into the local area before moving in, with only one in ten (10 per cent) saying they asked a neighbour what the community was like before committing to purchase, suggesting that buyers are moving blindly and with only a basic understanding of their new community. 41 per cent said their lack of research resulted in their housing honeymoon only lasting one week.
The top five areas that homeowners end up regretting not doing their homework on are:
- Traffic congestion
- True value of their home
- Local amenities (including schools, doctors, etc)
And it is not just buyers who are 'in the dark'; despite 63 per cent of homeowners saying their property is their pension, less than one in ten (9 per cent) could give an accurate current valuation of their home. In fact, UK homeowners admit to tracking their savings accounts and share portfolios more frequently than the value of their home, with over half (51 per cent) rarely or never monitoring their home's value.
The lack of available properties on the market was also shown to be a big concern with nearly half (43 per cent) of homeowners wishing they could make an offer on a home not currently on the market and a quarter (24 per cent) experiencing 'neighbour-envy', wishing they owned someone else's home instead of their own.
Alex Chesterman, founder and CEO of Zoopla comments:"UK homeowners are desperately uninformed when it comes to dealing in the residential property market. For most of us, buying a property is one of the biggest decisions and payments we'll ever make, so taking the right time and effort researching the market is vital. With the average UK home currently valued by Zoopla at £228,649 overpaying by 10 per cent can result in a £20,000+ gamble so it's well worth doing research into the prices paid by neighbours, current values and local trends before making an offer or setting a selling price."
Regionally, East Anglia is home to the fastest bidders in the UK, with 68 per cent of homebuyers making offers within 24 hours of the first viewing. Scots are tied with those in the North West as the slowest, with only 43 per cent putting in an offer over the same time.
Wales has the highest level of neighbourhood house-envy, with 35 per cent saying that they wish they owned a neighbour's property instead of their own. This contrasted with house-proud Scots, who had the lowest levels of only 8 per cent.
Chesterman continues: "Historically, carrying out the necessary research was a lengthy process, but this is no longer the case. Zoopla has created a unique database of every home in the UK, providing current value estimates, previous sold prices, local information and an online community that can share information with each other. Zoopla provides everyone has free access to all the tools and information required to make smarter property decisions."
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Notes to Editors
Average house value source: Zoopla (Feb 2008)
Percentage of regional population who make an offer on a home within the first 24 hours of the first viewing:
- East Anglia - 68%
- Northern Ireland - 67%
- South East - 62%
- Wales - 61%
- London - 60%
- South West - 56%
- Midlands - 52%
- North East - 48%
- Scotland - 43%
- North West - 43%
Percentage of regional population that could give an accurate value of their neighbour's property:
- East Anglia - 39%
Northern Ireland - 35%
= South East - 33%
= South West - 33%
= Midlands - 33%
Wales - 31%
= London - 31%
- North East - 29%
- North West - 28%
- Scotland - 27%
Percentage of regional population that wished they owned their neighbour's property instead of their own:
- Wales - 35%
- North East - 30%
- Scotland - 29%
- London - 29%
- East Anglia - 26%
South East - 24%
= North West - 24%
- South West - 19%
- Midlands - 15%
- Scotland - 8%
What is Zoopla?
Zoopla is a revolutionary online publishing service and community website providing information and tools to give users an advantage in the UK residential property market. Our aim is to create a transparent marketplace and we believe that information should be free and easily accessible to everyone.
How did it start? In early 2007, following the success of bringing DVD rental to the internet with LOVEFiLM.com, Zoopla founders Alex Chesterman and Simon Kain realised that the internet had yet to deliver meaningful change to the UK property market. It became clear that consumers lacked essential tools and information to help them understand home values, view similar properties, learn about past transactions...
...and then we thought:
- Why not offer users a tool to get access to FREE, instant value estimates on their homes or anyone else's?
- Why not let buyers make offers on ANY home, instead of just the 4 per cent of homes currently on the market 'for sale'?
- Why not let owners find out if there is any market interest in their homes without having to list them 'for sale'?
- Why not let agents and sellers market their 'for sale' listings FREE by providing them with easy-to-use tools?
- Why not let anyone ask/answer questions and share their knowledge about any homes or neighbourhoods?
- Why not put current value estimates, sold prices, homes for sale and local information all together in one place?
So, we have started by providing FREE value estimates and sold prices on homes, allowing sellers and agents to list homes for sale FREE, and letting all users edit information and upload photos. We have also launched some unique features, like TemptMe™ and AskMe™, which allow users to gain an insight into the market and discover information they won't find anywhere else.
By making TemptMe™ offers, buyers can try to entice owners to consider selling. Owners also benefit from this unique feature by being able to see what level of interest there is on their home without actually having to list it for sale.
The AskMe™ community feature allows anyone to find out more about any home or neighbourhood that they are interested in by posting questions for those in the know to answer.
Zoopla value estimates are calculated using a proprietary algorithm (secret formula) that we have developed by analysing millions of data points relating to property sales and home characteristics throughout the UK. The algorithm works by comparing relationships between home prices, economic trends and property characteristics in given geographic areas. Our estimates are constantly refined by our team of analysts, using the most recent data available and a variety of statistical methodologies, in order to provide the most current information on any home.
Zoopla Limited is a privately held company, backed by leading international venture capital firm Atlas Venture.