Zoopla has been forced to defend its valuation method after it emerged that asking prices in many parts of the country were up to 20% higher than the portal’s estimated average figure.
Last week, the Coventry Telegraph stated that the average asking price in the city is currently £210,000, but Zoopla’s pricing tool found the average property price in the area to be £173,000.
A Zoopla spokesperson explains: “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.”1
In Birmingham, asking prices were 19% higher than the average Zoopla value and in Smethwick, they were 18% higher.
This trend continues to London. In Kensington, the average asking price is £2.379m, but the Zoopla value is £2.158m.
In Glasgow, the average asking price is £148,000, but Zoopla’s average value is £164,000.