The survey of 2,000 UK homeowners who have had their home valued by an estate agent in the past three years found that just three in ten had an accurate idea of the estimated value of their home.
Almost half of UK homeowners (45%) who had their home valued via an estate agent or sold it in the past three years said it was worth more than they thought it was – on average by £46,305.
By contrast, just a quarter said their home was worth less than they thought, by an average of £44,313.
When all the results of the survey are taken into account, the net result is that the average home in the UK is worth £9,470 more than its owner realises. Multiplied by the 25 million private homes in the UK, this indicates that UK homeowners are sitting on up to £237bn of hidden equity.
For many homeowners, the disparity between perceived value and an actual valuation from an estate agent was far higher. 9% of homeowners whose property was worth more than they expected found that it was worth over £100,000 more, with 40% of these located in London and the South East. This equates to over 1 million properties nationwide carrying six figures of hidden equity.
Looking at London in more detail, 35% of homeowners in the capital found their property to be worth more than they expected, by an average of £117,000. When all of the survey results are taken into consideration, the average London property is worth £22,846 more than its owner anticipated.
Nationally, over a fifth (21%) of those whose home was worth more than they realised said they simply couldn’t believe what their home was worth, whilst 6% said they felt as if they had ‘won the lottery’ when they realised the scale of the equity hidden within their home.
For those who went on to sell their home and benefit from their hidden equity, the unexpected windfall had a significant impact, with eight in ten (81%) saying the additional money ‘improved their lifestyle’.
Exactly half (50%) said they were able to move into a better property than they expected as a result (for example, it had more bedrooms, was in a nicer area, had a garden etc.), and nearly a fifth (18%) of those aged between 55-64 said they were able to retire earlier than expected. For those able to retire earlier than expected, it was on average by over three years.
