How would you value one of London’s great houses?
Heath Hall
Valuations: The Good, The Bad and The Ugly.
The short answer is ‘what is someone willing to pay?’. That’s what your house is worth. Smart internet algorithms rarely have the right answer, the first step is finding relevant comparables. By relevant we mean properties that are in a similar condition, location and style. Of course, no property is the same. For London properties, the easiest way to value a property is to look at £ per sq. ft. To calculate this, you work out the gross internal area of the property and multiply by the comparable £ per sq. ft. E.g. 6,000 sq. Ft by £2,450 per sq. ft = £14,700,000.
In summary:
Good: The highest price is what someone is willing to pay.
Bad: What the market suggests the property is worth.
Ugly: What the bank thinks it’s worth.
A famous example of overpricing a property that backfired when sellers lost out on a potential buyer was Heath Hall in Hampstead Heath. This was initially listed at £100m but sold for £25m. The question is what price would Heath Hall have achieved if it was initially listed at £50m? Perhaps £35m? By starting at prices which are ridiculous this puts off serious buyers.
In the past, we have had buyers who refuse to even view properties because of the price as it’s simply a waste of time. We don’t blame them. Part of the key to successfully marketing luxury homes is sensible valuations. The most expensive homes in England should be priced realistically if they are to be sold.
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