Zoopla has defended its pricing tool after it was revealed that asking prices in many areas of the country were as much as 20% above the portal’s estimated average valuation.
Last week the Coventry Telegraph said that the average asking price in the midlands city was currently £210,000, while Zoopla’s pricing tool put the average property price in the area at £173,000.
A spokesman for Zoopla explained: “Zoopla valuation estimates are our assessment of the market value at any given time, calculated using a proprietary algorithm that continuously analyses millions of data points relating to property sales and home characteristics.
“It is misleading to compare average asking prices to our estimate of average property values in a given area since only a small fraction of homes in any area, typically less than 5%, are on the market at any given time.
“Therefore average asking prices can easily be skewed, whereas our estimated average values takes into consideration all homes in the area.”
In Birmingham, asking prices were 19% higher than the average values, while in Smethwick they were 18% higher.
The trend continued in London. In Kensington the current average asking price is £2.379m while the Zoopla average value stands at £2.158m.
In Glasgow the average asking price is now £148,000, while Zoopla’s average value is £164,000.
This is the result of 7 years of compounding algorithm error. It has been evident and apparent since 2010. I posted the graph of this several weeks ago but have been warning of this since EAT.
The real problem is Zoopla can walk away and say whoops sorry. Agents who have based their advice on value and sold properties as a result of reliance on the system, confirming what the vendor has already looked up on Zoopla are now very vulnerable to claims property has been under sold. Any agent who can not produce evidence to support their valuation or advice are now very exposed to claims on their PI.
Surveyors in areas where the market is artificially over inflated also face a problem of having signed off mortgages on properties which have been over sold and the properties are effectively in negative equity.
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TPOS (The Property Ombudsman Scheme) members have a legal responsibility to provide comparable evidence of their advice (Code rules 4 a, b and c – Link: http://bit.ly/1Tojcpm ). Zoopla or other similar guides should be viewed as just that, a guide. They are often wildly out of kilter with properties true prices.
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hang on , are you telling me that all the national advertising zoopla has done stating that smart KNOWS the value of EVERY house is a total fabrication , its lucky there not estate agents as they would surely be fined within an inch of there life by the advertising standards .. oh and for breaching the unfair trading regulations for blatantly lying
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