New Study Suggests UK Homeowners Overestimate the Value of their Homes by 22%
The insurer Aviva have revealed the results of their recent study which asked a random sample of 2,318 homeowners to estimate the value of their homes. The prices provided by these home owners, who were of various ages and locations, were compared with the price average of the Government’s UK House Price Index.
Respondents produced an overall average house price of £288,263. This is significantly higher than the latest government average recorded in May of £235,673.
Over-valuing appeared true in most UK regions with the exception of London. Homeowners were found to consistently estimate their property above the average price indicated on the Price Index.
The study also assessed the impact of Covid-19 on homeowner perceptions. Asked about the impact on their properties, a state of optimism was evident with one in 10 believing their house value had increased since the outbreak. Possibly, this is due to home renovation as it is though 85% of UK residents undertook some form of home improvement during lockdown.
Almost half think their property value has not changed in recent months, whilst a quarter expect some slight decrease to have occurred.
Gareth Hemming, MD at Aviva, has states that whilst a number of people may be quite accurate in their property estimates, an overall higher average suggests ‘some people may be unaware of current house values – or valuing their own homes through an optimisitc lens’.
However, he does suggest that there is evidence of house prices creeping upward. Futhermore, Covid-19 does not appear to have deterred would-be home owners. Aviva found that of non-property owners, two-thirds hope to be home-owners in the future, three-quarters of which feel it is ‘likely’ this aspiration will become a reality. He stated ‘we must hope that the gap between aspiration and reality starts to narrow as the UK gets back to business and the housing market picks up.”
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