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Tricky business of comparing eggs with eggs

How the other half lives. Last week I read about the UK’s most expensive house – 10 Belgrave Square, London SW1. A snip to you sir at just £100m, carpets and curtains not included.

Compare this with the cheapest streets in England and Wales.

The winner – or possibly the loser – is Oxford Street in the former coal mining town of South Elmsall in West Yorkshire, where an average house would set you back just £25,600.

Or how about a place in Tower Green in the St Hilda’s area of Middlesbrough, where you would need to lay your hands on just £27,400 to buy an average terraced house – or mews cottage as we refer to them in London.

It’s funny that the method of valuation for all the above properties is broadly the same, namely by comparison and experience.

In this respect I sometimes feel that my profession has become too mathematical in its approach to valuation.

All I hear these days from estate agents, lenders and brokers are prices expressed as so many pounds per square foot. Although this is usually valid it doesn’t always mean you end up comparing eggs with eggs.

A few years ago a surveyor who reported to me valued a large country house near Horley on the Surrey/Sussex border for remortgage purposes.

He reported a value to the lender of £800,000 and as a result I had to deal with both the lender and the broker involved, with the latter insisting that my guy was wrong because this only equated to two and sixpence per square foot which was way too low.

By coincidence I was taking my golf clubs for a day’s rest and relaxation that weekend and my route took me through Horley. As my devotion to duty has always known no bounds I decided to take a peek at what I was being told must be the most undervalued house in Europe.

It was indeed a splendid Victorian pile with turrets at every corner and Gothic gargoyles leering down from ivy-clad parapets.

It was a sort of poor man’s Hogwarts.

The house was unoccupied at the time so adopting a devil may care attitude to the laws of trespass I ventured onto the front lawn only to immediately dive under the nearest bush as the landing gear of a Boeing 747 passed 10ft above my head – and I exaggerate only slightly.

So my surveyor’s valuation was correct and reflected the fact that the international arrivals lounge at Gatwick Airport was next door.

Of course, as a result his valuation seemed ridiculously low on a pounds per square foot basis.

Sadly, I couldn’t convince either the lender or broker involved that we were right but then they had not stood on the front lawn.

This is why physical valuations are the way forward, and I haven’t even mentioned automated valuation models yet.


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