The majority of first time buyers in London overestimate house prices and homes in some locations considered expensive are often cheaper than they think, according to new research
Overall some 62% of people looking to buy their first home thought properties were more expensive with homes in boroughs such as Westminster, Brent, Camden and Hammersmith & Fulham perceived as some of the most expensive.
The survey from Barratt London asked 2,000 first time buyers looking for a home to buy in London over the next five years to guess the prices of properties in 12 London boroughs by only having the description of the property in front of them, along with the location.
In Westminster 79% of people overvalued the cost of a first floor, two bedroom apartment in Marylebone, valued at £849,995. Respondents estimated that the property was on the market for an average of £955,266, 12% more than the listed price.
In Brent 66% misjudged the value of the cost of a new build open plan apartment with two bedrooms in Stonebridge, estimating it would cost an average of £418,496, when in fact the property was listed at £379,950, miscalculating by 10%.
‘We carried out this research to find out how first time buyers perceive the cost of homes across London. A huge number of respondents clearly think that house prices in London are higher than they are which comes as no surprise in today’s property climate,’ said a spokesperson from Barratt London.
The research also revealed that first time buyers in London are anticipating higher property values overall, location dependant or not.
Some 67% overvalued the price of a £750,000 split level maisonette in Camden, valuing the property at an average of £780,821, more than £20,000 above the asking price. Interestingly, those who lived in the area estimated the property would cost more, valuing it on average at £814,114.
In Hammersmith and Fulham a two bedroom ground floor flat listed at £799,950, was overestimated by 61% of respondents at £825,456, some 5% higher than the asking price. What’s more, those who lived in area thought the property would be on the market even higher, at an average of just over £835,000.
In Lewisham 52% of people overestimated the value of a £425,000 two bedroom, Victorian top floor split level flat, speculating the property would cost an average of £433,983 to buy. Those who lived in the area under-estimated the cost by 4%, valuing the property at £407,861. Lewisham was the only area in study where locals underestimated the price.
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