How much is your home worth?

Well, most of us could be way off mark, according to property portal Zoopla…

New research from the website suggests eight out of 10 of us (78 per cent) have no idea, despite it being our biggest asset.

House prices have remained relatively stable over the past two to three years which has led to some homeowners overvaluing their properties.

However, longer-term rises over the past decade mean that most property owners (64 per cent) still undervalue their homes, with many having far more equity than they realised.

The majority of homeowners who undervalued their property did so by between £10,000-£20,000 (15 per cent) or £20,000-£30,000 (13 per cent).

However, more than a third (35 per cent) undervalued their home by £100,000 or more and nearly a fifth (18 per cent) did so by a huge quarter of a million pounds or more, leading to an unexpected windfall for those who went on to sell.

When questioned as to what increased their home’s value throughout their ownership, 33 per cent highlighted that the area had become more desirable and the same proportion (33 per cent) said that work, such as extensions, remodelling or loft conversions, completed on the property had added value.

Furthermore, 29 per cent said that demand had increased for the type of property they owned.

Those who have owned their home for 30 years or more are more likely to have an accurate idea of its value (31 per cent), compared to the wider average of 22 per cent.

This group tends to be more aware of fluctuations in house prices, checking the value of their property an average of four times a year.

For others, their home’s valuation has left them less happy, with 13 per cent finding that their estate agent’s valuation was less than they hoped, on average by a very significant £46,866.

When asked why they had overvalued their property, nearly half (49 per cent) said that they assumed property prices had increased more than they had.

Meanwhile, a quarter (25 per cent) said work completed on the property didn’t add as much value as expected and 13 per cent highlighted that the type of property they owned was less in demand.

Receiving less money than expected in the sale of their homes impacted 70 per cent of those who overvalued their property, most commonly leading to them having to stretch themselves financially to afford their next home (25 per cent).

In addition, 14 per cent said they would have less money than expected for their retirement and 14 per cent said they had to cut wider spending to account for the shortfall.

Daniel Copley, consumer expert at Zoopla, says: “For most people, homes are their most valuable asset and most homeowners will need the money in the future, whether that is to fund their next home or to free up money for retirement.

“It’s therefore surprising to see how few have a clear idea of their property’s value and are missing out on potential gains when selling their homes.

“It’s even more surprising when you consider how easy it is to get a quick and accurate valuation online on websites such as Zoopla.

“While for most it is good news and their home is worth more than anticipated, a significant number have not realised that the house price boom has slowed down and they are overvaluing their property.

“This can lead to issues agreeing on an asking price with estate agents.”