A new study by property technology solution, Spec, has revealed that buyers and sellers across the capital are losing out on tens of thousands of pounds because of outdated and inaccurate property measurement techniques used to create floorplans.
The inaccurate data is being used as the basis of valuations, leading to properties being over or undervalued as a result.
The report, entitled, Risks and Costs of Mismeasurement in Residential Property explores how outdated measurement techniques can have a significant impact on the accuracy of property value and reveals properties in the capital are mis-sold by £33,800. On a London wide basis, this means that the discrepancy in valuation runs to just under an astonishing £119bn. This is three times larger than the total refunds and compensation paid out to customers who have complained about PPI since 2011.
Spec’s researchers have found that one in eight properties in the study had an area discrepancy of at least 100 square feet, the equivalent to £57,697 in property value. The average discrepancy across all properties was 54 square feet, the size of a small bedroom or study. Particularly in high value areas, even small differences in a property’s stated floorspace can have significant impact on its valuation, equating to the loss of hundreds of thousands of pounds if the square footage has been overstated.
The study found clear evidence of widespread inaccuracies in data available to consumers. In 60% of cases, floor plans over-stated the size of the properties. Spec’s research highlights the limitations of old-fashioned property measurement techniques.
Anthony Browne, senior advisor to Spec said, “This is the great hidden scandal in the property market. For almost everyone, their home is the most valuable thing they ever buy, but they usually have to rely on very inaccurate and misleading measurements that could affect its value by hundreds of thousands of pounds.
“It is ridiculous that when you buy a pint of beer or a pound of sugar you know exactly what you are getting, but when you buy your home you don’t. The size of a home clearly affects its value, so it is essential that the measurements are accurate.
“For prospective homeowners, it is essential that they obtain accurate size measurements for properties that they are buying. Previously that was technically difficult and prohibitively expensive, but with new 3D capture technology such as Spec, it is now quick and affordable to provide highly accurate floor plans, giving buyers and sellers peace of mind about the true size of their property.”