My big PropTech problem……@WillumLong, Co-Founding Partner, @MadisonOakley
Brrrrring brrrrrring – ‘Madison Oakley good afternoon Willum speaking’, “Hi Will its Mr B, how are you keeping”, “Very well thanks Mr B apart from a lingering cold, all is well and yourself?”, “Fine and dandy sir thank you. Anyway Will, I don’t want to take up your time so just a quick one but my solicitor who is sorting out my affairs needs a value for my house. They have told me I can get this instantly online at one of these sites that do them. I just want to know which one you recommend?”…..
“They said what Mr B!!? I’d be careful with that, especially in your circumstances”…..
So, to give you some context – Mr B lives on one of those roads in Bath that is very long (stretching around 1.3 miles) and has properties at one end that will cost you no less than £1.2m. In the middle, you can find some ex-council semi’s for around £250,000 & flats for £185,000. At the far end, there are early Victorian terraces for £300,000, some 1930’s semis for £400,000 and a few detached houses or bungalows of varying styles. So, in the space of 1.3 miles, you have a vast range of properties all on the same road. This does not even take into account the surroundings – at one end, houses back onto a busy main road but at the other, its fields behind.
It is therefore nigh on impossible for a computer to know this or work out an accurate value – no chance (and no disrespect to you bots, you are mostly brilliant!)
If you’re thinking that “surely this system just works out and average £ per sq ft price and punches out a figure” then again you will be wrong. Well, it could operate like that but this methodology does not work in Bath, as we’ve been trying to educate out of area buyers for many years.
The value of a property is based upon many factors – style, size, plot, amenities, condition, location, aspect, neighbours, potential, parking etc. The vast majority of these ‘Instant Valuation’ bot systems pull their data from the Land Registry which only gives a few bits of info on the property (number of bedrooms, price & if its detached/terraced etc…).
I know a 4 bed semi detached at the far north side of this road will cost you £1.3million. In the middle part of the street you could pick up a 4 bed for £300,000. What this basic summary is not telling you is that the North end one is an incredible 25000sqft 4 storey Edwardian villa with balcony, parking, garage, some of the best views of Bath and a huge garden. The other property is an ex council original 3 bed that’s been turned into a 4 bed student let by using one of the reception rooms. Average price therefore of the 4 bed semis on this road = £800,000? I’m either going to be a dead chuffed ex council house owner or a very disappointed Edwardian home owner in negative equity!
Why are professional bodies referring bots to do significantly important tasks when they should know better, especially when dealing with most people’s largest asset? This is where I have a huge issue with how we are starting to rely on PropTech. The tech is in its infancy and at the present moment from a valuation bot point of view, vastly inaccurate. Relying on this could and will have costly repercussions.
To tie this off, I tried it out for Mr B. The in depth research I did for him as an experienced professional agent brought his house out at a comfortable £675,000 £700,000. The most commonly used ‘House Price’ checker gave a range of £432,000 to £585,000 with a value of £509,000.