Is Mouseprice Accurate: Are Mouseprice Valuations Reliable

Mouseprice property valuation Torquay - Is Mouseprice Accurate

If you are looking into the valuation of your home before you sell it, or if you want to get an idea of the value of a property you intend to buy, you might be asking is Mouseprice accurate?

Mouseprice valuations are not accurate, as the primary source of its calculations is HM Land Registry’s price paid dataset, which is often months behind from when properties were sold. If a property hasn’t sold for a while, and has since been upgraded, its Mouseprice value will be completely wrong.

Please also read this article to discover how you could save £71,475 on your next mortgage if you sell your house and rent before buying againEven I was amazed when I did the calculations! The strategies you learn in this article will not only save you money, but it will also reduce the stress of buying your next home.

I use two of my properties to demonstrate how Mouseprice is inaccurate, as I did when looking at How Accurate Are Zoopla Estimates.

For example, my Leeds property is overvalued by at least 11.5% and my Torquay property is undervalued by 41.3% (see below).

If you take nothing else from this article, it is to know that the accuracy of Mouseprice valuations should be taken with a large pinch of salt.

Mouseprice valuation estimates do not include

Mouseprice valuation estimates do not include any extra work that has been done to the property which has yet to be recorded. This includes property extensions, extra rooms, land additions* and property makeovers and renovations.

The data on Mouseprice is updated every month, and is typically updated from Land Registry’s price paid dataset towards the end of every month. Mouseprice also receive data from the RoS (Registers of Scotland) for Scottish sold prices too.

* I’ve put an asterisk next to “Land Additions“, as I’ve purchased an extra 1.5 acres of land behind my own property since I purchased it. Of course, Mouseprice doesn’t know about this land addition, which means its estimate of the price of my property is totally inaccurate.

Why Mouseprice valuations are not accurate

  1. Excluded information: Mouseprice data does not include property extensions, extra rooms, land additions and property makeovers and renovations.
  2. Data sources are out of date: Data sources such as Land Registry are not up to date and the information fed through to Mouseprice estimates can sometimes lag by many months. This could mean in a fast moving market, the property values shown on Mouseprice are not up to date with current property trends.
  3. Not a formal valuation from an estate agent or surveyor: Mouseprice’s own FAQs section explains what the estimate isn’t, which is that Land Registry do not provide information on other property characteristic information. 
  4. Different property styles on the street: Mouseprice takes an average of all nearby properties, which can include all different property types, ages and designs, which is not going to be a true representation of the price for each property.
  5. No recent sold prices: If there are no comparable sold prices in the nearby area or street, Mouseprice’s valuations are bound to be wrong. For example, we had this problem when we recently remortgage a property to find sold comparables for the valuer. The same will be true for Mouseprice, but at least a valuer can use their grey matter to update their value estimate, whereas Mouseprice’s valuation is based on an Automated Valuation Model (AVM), or in other words it’s a machine calculation.
  6. Lack of buyer feedback: Estate agents will value properties dynamically, which will be based on what is happening in the market at the time. For example, if competition is strong for say 3-bedroom houses in an area, they may begin to raise the price for new instructions of 3-bed houses to take account of increased competition. Whereas Mouseprice will not take account of these types of changes until the information is updated on their database, which may be some weeks or months later.
  7. Examples below are wrong: The examples used below are Mouseprice’s valuations of two of my own investment properties, which I know have the wrong estimated valuations. One property is overvalued whereas the other is undervalued. The flat in Leeds wouldn’t even be worth more than £200,000, let alone valued at £223,000. Whereas the property I own in Torquay has an estimated price of £264,000 vs our recent mortgage valuation of £450,000, meaning it is undervalued by at least £186,000 (see below).

How to understand Mouseprice current valuation

In the following image you will notice the highlight numbers in the red rectangles. There are three numbers in one of these rectangles, as follows:

  • Low estimated valuation – £227,000.
  • Current valuation – £264,000.
  • High estimate valuation – £300,000.

The current valuation of £264,000 is a simple average of the high and low valuations, i.e. (£227,000 + £300,000)/2 = £263,500, rounded to the nearest £1,000 is £264,000.

You will also notice one of the red rectangles shows the property’s most recent sold price, which was £250,000, and is correct as I know that’s what I paid for it with my business partner.

The other information that is completely wrong is Mouseprice’s rental value, which in the case of my Torquay property shown below is currently £440 per month. We only recently let this property after we remortgaged it from bridging finance at £1,700 per month.

Mouseprice property valuation Torquay - How to understand Zoopla estimates

Are Mouseprice valuations too low?

Some of the Mouseprice valuations are too low, with one example showing that a property is undervalued on Mouseprice by over £186,000 or 41.3%.

How wrong are Mouseprice valuation estimates?

Another property I own, which in this case is in Leeds, I also know Mouseprice has the value wrong. In the image below the estimated price on Mouseprice is £223,000, but this valuation is over the real valuation, which is under £200,000. So at the very least Mouseprice has overvalued this property by 11.5%.

The other other point to note on this Mouseprice property valuation is the rental value. On the image below you should be able to make out that Mouseprice’s range of rental values is from £650 to £2,650, which on anyone’s scale is a huge range. As it happens this Leeds property is currently rented for £895 per month, but Mouseprice’s rental valuation is £1,261.

Mouseprice property valuation Leeds

Are Mouseprice valuations too high?

Some of the Mouseprice valuations are too high, with one example showing that a property is overvalued on Mouseprice by over £23,000 or 11.5%.

Why use Mouseprice valuations?

Mouseprice valuations are designed to help sellers decide the asking price before selling their home, and to help buyers decide what they could offer on a home they want to buy. The Mouseprice house valuation is their calculation of what a property could be worth, but is not necessarily its true value.

Can Mouseprice valuations be use to negotiate?

Some people may use Mouseprice valuations as a negotiation tool, but unless the seller is unaware of how inaccurate the Mouseprice valuations can be, it is unlikely to be of any use.

Are Mouseprice valuations rubbish?

It’s might seem a bit harsh to say that Mouseprice valuations are rubbish, but with two examples from two properties that show valuation discrepancies of 11.5% overvalued and 41.3% undervalued, you could argue that rubbish is the right way to describe the information provided by Mouseprice.

Final thoughts about is Mouseprice accurate

It is okay to use Mouseprice estimates as a guide to property values, but you are far better to find property sales comparables instead. If you want to learn more about how to research property values in your area before selling or buying property, please take a read of this article: Property Sales Comparables: What It Means. This article includes 16 comparable factors to consider when researching property values.

What can happen is that Mouseprice valuations can give sellers false hope that their property is worth more than it is. It is only when an estate agent visits to carry out a true valuation when reality hits home. I’d love to believe the Mouseprice valuation estimate of my property in Leeds is correct, but I’m a realist.

If you are a homeowner looking into how accurate Mouseprice valuation estimates are, make sure you don’t start to overinflate the value of your house in your head. This could lead to disappointment when you come to sell.

The Mouseprice valuation estimate can also work against homeowners, as some buyers rely on the estimates and if the estimated price on Mouseprice is lower than its true value, this may lead to cheeky offers being made. But any savvy homeowner will know the Mouseprice valuation is no an accurate valuation of their home.

The thing is, Mouseprice valuations can be right or close to the real value, but unless you know the local market you won’t know whether it is right or wrong. But if you know the market you probably wouldn’t be using Mouseprice valuation estimates in any event.

To finished off on the subject of is Mouseprice accurate, if you think they are correct because an estate agent recently valued your house and it agreed with Mouseprice’s valuation, even a ‘stopped‘ clock will be right twice a day.

Please don’t forget to read this before you leave…

Please don’t forget to also read this article to discover how you could save £71,475 on your next mortgage if you sell your house and rent before buying againAs I said earlier, even I was amazed when I did the calculations! Learn about how you will reduce the stress of moving house, whilst at the same time potentially save thousands in the process!

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Is Mouseprice Accurate: Are Mouseprice Valuations Reliable

Article written by Russell Bowyer who has been investing in property since purchasing his first commercial property in the 1990's for his own Chartered Accountancy business. But his first property investment project was to turn an old dilapidated restaurant into a large 5-bed home, which he purchased for £117,500 and sold for £450,000 (to see an "after" photo of the house before it was sold see here: About). Russell owns a number of investment properties, which includes houses, flats and HMO's. More recently he has turned his creative side to investing in property using lease options. His largest lease option deal to date was to acquire 12 properties worth over £2 million for just £12, which means he paid just £1 to acquire each property!

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