Flats and houses in London are typically being sold based on outdated and inaccurate property measurements which means sellers and buyers are losing out, it is suggested.
It means that properties could be ‘mis-sold’ by an average of £33,800, while for houses this rises to £57,697, according to a study by property technology providers Spec which says sellers, buyers and estate agents need to check it out.
On average, the discrepancy in size across all properties was enough for a small bedroom or study at 54 square feet, in terms of the figures which are being used for floorplans and valuations, with inaccurate data resulting in properties being over and undervalued.
The report, entitled, Risks and Costs of Mismeasurement in Residential Property, explores how outdated measurement techniques can have a significant impact on the accuracy of property value.
On a London wide basis, this means that the discrepancy in valuation runs to just under £119 billion with one in eight properties in the study having an area discrepancy of at least 100 square feet, the equivalent to £57,697 in property value.
The average discrepancy across all properties was 54 square feet, the size of a small bedroom or study. Particularly in high value areas, even small differences in a property’s stated floor space can have significant impact on its valuation, equating to the loss of hundreds of thousands of pounds if the square footage has been overstated,’ it points out.
The study found clear evidence of widespread inaccuracies in data available to consumers. In 60% of cases, floor plans over stated the size of the properties and it says that the research highlights the limitations of old-fashioned property measurement techniques.
‘This is a great hidden scandal in the property market. For almost everyone, their home is the most valuable thing they ever buy, but they usually have to rely on very inaccurate and misleading measurements that could affect its value by hundreds of thousands of pounds,’ said Anthony Browne, senior advisor to Spec.
‘For prospective home owners, it is essential that they obtain accurate size measurements for properties that they are buying. Previously that was technically difficult and prohibitively expensive, but with new 3D capture technology such as Spec, it is now quick and affordable to provide highly accurate floor plans, giving buyers and sellers peace of mind about the true size of their property,’ he pointed out.
The report also says that the risks of mismeasurement due to human error, insufficient data, and the systematic application of average sizes, reveal how the current regulatory processes in place for correct area calculation are failing.
It calls for current processes to be reviewed to ensure consumers are properly informed and have confidence and trust in the data they are provided with and that industry professionals must ensure that properties are being accurately measured to create floor plans that stand up to scrutiny and adhere to legal requirements.