How We Do It
Our economists have used an industry standard method called hedonic regression, which works out the value for each individual characteristic of a property. This is the reason why we ask how many bedrooms, toilets and reception rooms a property has, or if it has a garden or a garage, because each characteristic has a percentage value. Then, we take data from the Land Registry, the Office of National Statistics, the Department of Communities and Local Government and financial markets which provides us with a base average price for every property in the UK. Once we have applied the characteristic values (which are contained in an algorithm that we have developed specifically for this purpose) and adjusted the average figure according to the percentages relevant to the individual property, we are then able to provide you with three figures:
- Average Price -
This is what we would suggest the property is worth in a reasonable
market with properties selling steadily in your area. It is also
based on a moderate demand in the local area for properties of the
same type.
- Upper Price - This
is what we would suggest the property would be worth in a
particularly strong market of if there was a high demand in the
local area for properties of the same type
- Lower Price - This is what we would suggest the property would be worth in a slow market, or if there was not much demand in the local area for properties of the same type.
Depending on local market demand, it could be that the property is actually worth nearer either the Lower or Upper figures, rather than the Average figure.
Of course, our valuations are only as accurate as the information that you enter, so it's important that you read the Frequently Asked Questions section before you start using the Property Price Advice website.
We update our data every month, to account for seasonal adjustments, interest rate changes, market changes etc, so you may find that, over time, the same property could change in value. This is important, as we want to make sure that we give you the most up-to-date price on a property, rather than a historical value.
If you would like more information on our econometrics and the methods used to generate our algorithm, please download our Technical Specification document.
