How accurate are Zoopla estimates?

When it comes to selling your home, you want to know how much it’s worth. Without that crucial information, how would you know if you’re getting a good deal?

There are loads of websites designed to help you determine the value of your property and one of the most popular is Zoopla. The question is, are Zoopla valuations accurate? Are they reliable? And what is a valuation anyway? We find out…

Let’s start by learning more about how Zoopla arrives at the estimates it provides.

Just how does Zoopla calculate its valuations?

On the Help Centre area of their website, it says: “We want to give you the most accurate house price estimates possible, and we’re always looking for new ways to improve. The Zoopla estimates are our opinion of the market values of homes and are based on a large number of data points relating to property sales, value trends and home characteristics through the UK, including publicly available data such as that from HM Land Registry and Registers of Scotland. 

“Estimates are generated from our Automated Valuation Model (AVM), powered by Hometrack. As well as providing an estimate, the AVM produces a confidence score that describes the accuracy of the price estimate. The accuracy is influenced by a range of factors, such as:

• The type, age, and size of your property
• How many properties in your local area have been recently sold
• If we can identify the exact location of the property
• The number of similar homes in the area
• The state of the housing market as a whole

“The more up-to-date information we have about a property, the more accurate our estimate will be. We now offer more coverage and are statistically more accurate, but our calculations are estimates only.”

Zoopla adds: “New data cannot be manually fed into the AVM, not by users, nor by ourselves. Therefore, we’re unable to manually add estimated price ranges.”

Interestingly, Hometrack that they mention, “…is part of Zoopla, owner of some of the UK’s most trusted digital platforms including Zoopla, PrimeLocation and Property Software Group.”

Hometrack adds: “Our AVM can replace surveyor valuations, without increasing risk, in a large proportion of cases. We constantly monitor our model, making sure it performs consistently over time – so you can rely on it when making lending decisions. It’s the only AVM to be proven to be accurate over the full cycle since 2004 and we’ve exported it to Europe and Australia.”

“Hometrack’s AVM has been used in over 50 Residential Mortgage Backed Securities and was the first model accredited by all of the major ratings agencies.”

However, Hometrack isn’t Zoopla’s sole source of information. Elsewhere on their website, Zoopla say: “We use data from a number of trusted sources including HM Land Registry, Royal Mail, Ordnance Survey and Registers of Scotland. This helps us provide estimates for over 26 million properties in the UK.

“The data includes:

• Previously sold prices of the property and when it was sold
• Changes in the market value of similar properties sold nearby
• Property features, for example, the number of bedrooms
• Local area information such as schools and crime rates

“The data does not include:

• Any extra work that has been done to the property and has not been recorded yet (including extensions, extra rooms, makeovers)

“Data is updated monthly. The exact date depends on the source. Our estimate is a guide only. It should not be used in place of a valuation by an estate agent.

“A Zoopla house price estimate is our calculation of what a property could be worth. It’s designed to help sellers decide the asking price, and buyers decide what they could offer.

“It’s based on a large number of data points relating to property sales through the UK (region, property type, value trends, home characteristics, and asking prices of similar properties in your local area). It also includes publicly available data such as that from HM Land Registry and Registers of Scotland.

“Our estimates are not formal valuations. We advise you contact an estate agent or surveyor for a more accurate valuation, as they can conduct a visit.”

“Ultimately, a Zoopla house price estimate is yours to use however you choose.”

Factors affecting a valuation

There are five major influencers to a valuation. These are (in no particular order):

1. Condition

When you’re buying a house, condition will play a major role and people are likely to pay more for one that appears to be in a better condition than a neighbouring property that needs some TLC. Often, if a buyer can’t picture themselves living in a property, their offer will be lower. Not putting in the time and effort into staging your house for viewings will put you at a distinct disadvantage, but Zoopla works on numbers and cannot know the condition of your home.

2. Upgrades
   In a similar way to condition, any upgrades you’ve made to your home will naturally affect its value. A useful extension or a top of the range modern kitchen would add a lot to the value of a home. Equally, a landscaped garden that utilises the space available could command a premium. However, Zoopla cannot know about these upgrades and the things that make your home stand out from others will not be considered by its estimation tool.
3. Incorrect data

Accuracy is vital and there are times when property data is incorrect. For example, an office room may not have been classed as a bedroom and mistakes will influence the overall estimate.

A real life example of this can be seen in a Trustpilot review for Zoopla from January 2022 where ‘Chris L’ writes: “Just checked the valuation on our house as the values have been fluctuating wildly over the last 12 months on Zoopla. Ours is undervalued as they don’t know we have extended the property. However, I find that our neighbour’s property which has one bedroom less than ours is now worth £1.3m. Up £0.8m in the last 3 months! I am sure they will also be interested as to where their two extra bathrooms are. Also two doors away, identical size to ours, has gone up by about £0.3m in 3 months, but still £0.5m less than our neighbour’s much smaller property. Absolute joke, if not grossly incompetent.”

Similarly, ‘Martha’ also reviewed Zoopla on Trustpilot in January 2022 and stated “Zoopla estimate valuation of our house today was £136,000, we accepted an offer of £197,500 – so completely inaccurate!”

This caused an issue for ‘Jenni’ who wrote about Zoopla on Trustpilot in October 2021, commenting: “They [Zoopla] put a price down for your property and it stays on their site forever – even when the price is wrong and you complain and independently have a valuation – they do not remove their wrong price – this makes selling your house difficult. I got my estate agent to remove my details from Zoopla and still it stays on the internet causing issues with prospective purchasers.”

4. Different property styles

   It’s not often that every property on one street is the same as those surrounding it. There could be bungalows next to semi-detached houses, or flats above shops. All of these will have a different appeal and command their own price. The data on Zoopla is for a postcode and although it’ll list the individual property, it won’t be able to add a premium for period features or reduce the valuation for less desirable qualities (such as lacking a central heating system). As such, calculating an average price for the street is going to prove difficult.

5. Comparable properties

As we previously mentioned, Zoopla bases its prices on an average. One of its main sources of local knowledge is ‘recently sold’ prices for properties that have sold within a set distance of your home. The problem can be that if it has been a long time since a property was sold in your vicinity, the data for your particular area will be less accurate. To improve this, you could extend the area to include neighbouring streets; but this carries the risk that properties will be included that are not like yours.

What is a valuation?

Zoopla’s comment that ‘Our estimates are not formal valuations’ raises an important point. What is the difference between an estimate and a valuation, and what is a valuation?

Despite the term being used a lot, It’s not a valuation. It’s a market appraisal. Most sellers, and estate agents, make the mistake of calling the pricing process a ‘valuation’ whereas what an estate agent or a cash buyer will give you is a market appraisal. This is an indication of the price your property is likely to achieve in the current market.

The truth is that no one knows what your home is really worth. Some valuers will have an idea and some of them will be as accurate as they possibly can, but, in the end, every valuation you get is an estimate. It’s not an exact science. It’s an opinion and a guideline based on different bits of supporting evidence and market experience. The valuer gives you a range that you could possibly achieve if you were to put your property on the market at that particular time.

An actual valuation is produced from a formal survey, normally carried out by a chartered surveyor. It can be used where a property’s value is required in probate, divorce, mortgage, remortgage, loans, and bankruptcy. Chartered surveyors have professional qualifications to do what they do, and they are regulated by the Royal Institute of Chartered Surveyors.

It’s for this reason that a Zoopla estimate is, as they say themselves, ‘an estimate, not a formal valuation’.

However, it’s the wide price range provided that can cause disappointment. To test the system, we used a postcode of a three-bedroom semi-detached house in West Midlands and received an estimated price of £288,000. However, there was also a ‘low estimate’ of £259,000 and a ‘high estimate’ of £317,000. That’s a huge range of £58,000.

That range was reduced to £21,000 when a different property was chosen. This time we used the postcode of a three-bedroom semi-detached house in Worcestershire last sold in September 2018:

Assumptions made by Zoopla

The Help Centre of Zoopla’s website identifies that their price estimates are based on “a property being in ‘average condition’. We think of average condition as somewhere in between the best and worst properties on your street. The difference between poor and average condition, or average and good/excellent condition, can be as much as 10%.”

Confidence levels

As the image above shows, the estimated price provided for the three-bedroom semi-detached house in Worcestershire carries a ‘high confidence’ label. But what does this mean?

Zoopla themselves state: “Our estimates are rated by confidence level. If yours shows ‘Low confidence’, it means we do not have enough data on your property to be certain of our calculations. Just so you know, we’re aiming for ‘High confidence’ for all properties.

Local market conditions, the state of your property and your selling requirements (e.g. if you need a quick sale) impact the selling price.

“The scale of the estimated range varies based on the quality of data available about your home. When less data is available, we show you a broader price range. When we have more data, the price range is narrower.”

What does all this mean for me as a house seller?

Ultimately the true value of your home is what a buyer is willing to pay for it at that particular time. This is generally worked out by comparing your property with other properties on the market, taking into account what they are charging and what additional features your home offers. For example, perhaps you have more parking than your neighbours, a garage, more land, or a downstairs toilet. Maybe you’ve had an extension fitted. If so, Zoopla doesn’t account for such major changes.

Importantly, as they hint, Zoopla’s estimate tool starts with the price your property last sold for, then considers the average increase or decrease that other properties in your area have experienced since. This won’t always work in your favour if you (for example) live in a street where terraced houses are common but yours is a semi-detatched.

So, how reliable are Zoopla house values?

The reliability of Zoopla’s valuation tool varies massively. The estimate is much more likely to be accurate if other properties in your area are identical to your home in size, age and condition. When valuing a more unusual property, the estimated value is likely to be somewhat less accurate. Also, areas where properties are sold regularly will see more reliable estimates because Zoopla’s record of house prices will be more up-to-date than rural areas with fewer homes.

How should I get a house valuation?

Keeping all that in mind, you’re probably now wondering how you can get a valuation; or as mentioned, a market appraisal (to be more precise).

The only real way is to use a property professional. And for that matter, you’ll want to invite a few so that you have a range of figures. This way, you’ll have a person that understands the market, the area, and can look at your home through a buyers’ eyes. Here’s how you could get a more realistic market appraisal for your property:

Use an estate agent

Inviting a few estate agents to your property to provide their opinion on the price point at which you should market your property will mean you’re benefitting from their local knowledge and experience of what the market is demanding. They could have their own interests at heart and submit a valuation that is higher than you’re expecting. Remember that this isn’t a promise of the amount you’ll receive and if your house is on the market for too long, potential buyers will wonder why, and likely assume that there’s something wrong.

If you do have professional agents assessing the market value of your home, you’d be wise to get several valuations. You’d be surprised at how much they might vary.

Research

Doing your own research will enable you to take into account what has been done to your property and the improvements you’ve made, as well as its overall condition. Take a look at the price for which properties actually sold by using Rightmove. This will tell you how much was paid; rather than the asking price. Armed with this information, you can gauge where to price your property. Furthermore, Nationwide has a house price calculator tool that can calculate the growth of house prices in your area to give you an indicative figure.

Chartered surveyor

The best way to get a true valuation on your home is to use a chartered surveyor. This can cost a lot of money; sometimes as much as £800. However, what you’ll get is an accurate valuation of your property because a chartered surveyor will assess the condition of your property and use their knowledge of your area.

Here’s an alternative…

When we talk about valuations and market appraisals, it’s because we want to know the ‘asking price’ for a property. The thing is, an asking price only applies if you’re selling your property on the open market. And when you choose that route, you’ll have to take into account the cost of paying agent fees and legal fees, as well as the invasion of your privacy when people come for house viewings. Can you really put a price on that?

If you choose to sell to a cash buying company, you won’t have people walking through your property pointing out the cracks and dated décor. You won’t have a ‘for sale’ sign in front of your home to alert the neighbours that they can go online to have a virtual snoop around. What you will get is a hassle-free sale when you choose a reputable company, as well as their property expert to provide you with a free, no-obligation market appraisal. The price they offer is likely to be around 80% of your property’s true market value, but that is to take account of the fees that you won’t have to pay, the renovation work undertaken by the company to get it re-sold, and the convenience of selling to a buyer that isn’t in a chain.

Any questions?

We hope that this article has answered questions you have about the accuracy of Zoopla estimates, the factors that are considered to reach the estimate, and what you can do to gauge the real market value of your property. If the idea of a hassle-free cash sale sounds appealing and you’d like to chat with us about a fast cash sale, our experts are available 24/7. Send an email or call us for more information.