Home owners over-estimate value of their properties
● One in ten believe value has increased since virus outbreak
Homeowners in Scotland could be over-estimating the value of their property by around £35,000, according to a survey.
Nearly one in ten (9 per cent) home owners across the UK believes their house has increased in value since the coronavirus outbreak, insurer Aviva found.
Its survey of more than 2,300 homeowners found that, on average, people estimated the value of their home at £288,263.
This is £52,590 higher than the average UK house price in May of £235,673 as recorded by the Office for National Statistics (ONS).
In Scotland people on average estimated the value of their home at £189,844, compared with an average Scottish house price of £154,648.
Some recent house price reports have shown property values hitting new records as pent-up demand is released into the market and buyers take advantage of cuts to stamp duty or land and buildings transaction tax.
However, economists have said that looking further ahead prices are likely to come under pressure amid wider economic factors such as rising unemployment.
There have also been signs that mortgage lenders are becoming increasingly cautious about lending to people with smaller deposits. Across the UK, homeowners in London were the only ones who typically appeared to underestimate the value of their property.
Those in the nor th west of England were particularly likely to have an inflated perception of what their property was worth, the findings indicated.
The typical estimate there was £242,449 - 44.1 per cent above the average house price in the north west of £168,261.
Some 85 per cent of people generally have undertaken some form of home improvement during the lo ckdown, the study found, which may be behind the high levels of house price confidence among some home owners.
Nearly half (48 per cent) of homeowners however think the value of their homes has not changed for better or worse in recent months.
Around a quarter (27 per cent) expect there has been some decrease in value, although most people feel this reduction will have been slight.
Gareth Hemming, managing director, personal lines, global general insurance for Aviva said: “While a number of people may be quite accurate in their property estimates, the fact that the numbers overall are so much higher than official figures, suggests that some people may be unaware of current house values - or are valuing their own homes through an optimistic lens.”
The report also suggests there could be a boom in “granny flats” around the corner- although in many cases adult children or lodgers could be living in them.