Understanding comparable sales

Every valuation of a home, whether it’s from an agent, a surveyor or a website, comes back to one question: what have similar homes nearby sold for recently? Those sales are called comparables, or comps. If you can read them properly, you can check any valuation yourself and spot one that doesn’t add up.

What counts as a comparable

A comparable is a completed sale of a home that a buyer of your home might also have considered. The closer the match, the more useful it is. Valuers look at four things.

Similar property

Same type first: a semi compared with semis, a flat with flats. Then similar size, ideally by floor area rather than bedroom count, and similar age and construction. A 1930s semi and a 2010s new-build semi with the same number of bedrooms can sell for very different prices.

Close by

Same street is best, then the same estate or neighbourhood. Distance matters less than whether buyers see the areas as interchangeable. A home half a mile away in the same school catchment is often a better comparable than one 200 metres away across a main road or a council boundary.

Recent

Ideally within the last six months, and rarely more than two years old. Older sales still help, but they need adjusting for how the market has moved since.

A normal sale

The sale should have been on the open market between a willing buyer and seller. Sales between family members, repossessions, auctions and right-to-buy purchases can be well off market value and are usually best left out.

Sold prices versus asking prices

This is the most common trap. Asking prices on property portals are what sellers hope to get. Sold prices are what buyers actually paid.

When the market is strong, homes can sell at or above the asking price. When it’s slow, sales often agree below it, sometimes well below. Homes that have been on the market for months with price reductions are a sign the original asking price was too high, not evidence of value.

Use asking prices to understand what you’d be competing with if you sold. Use sold prices to understand value.

Why recent sales can be missing

In England and Wales, a sale only appears in HM Land Registry’s public data after the purchase has been registered, which normally happens some weeks after completion and can take longer. Agents know about sales that have been agreed or completed but not yet published, which is one reason a good local agent can see the market more clearly than any website.

If the most recent comparables you can find are six months old, the market may have moved since. Ask agents what’s sold recently that isn’t public yet.

Adjusting comparables

Comparables are rarely identical to your home, so valuers adjust them. Two adjustments do most of the work.

Time

If a comparable sold 18 months ago, ask how much prices in the area have changed since. The UK House Price Index, published monthly by the Office for National Statistics and HM Land Registry, gives average changes by local authority and property type. If local prices for that type have risen 4% since the sale, a £250,000 sale then is roughly £260,000 in today’s market.

Differences

Then adjust for the ways the comparable differs from your home. A bigger garden, an extra bathroom, off-street parking, a better or worse condition. There’s no fixed price list for these, and that’s where judgement comes in. The best evidence is two sales on the same street that differ in one main way.

A worked example

Say you own a three-bed semi in good condition with a garage. You find four sales nearby.

• A: three-bed semi on your street, similar condition, no garage, sold four months ago for £268,000.
• B: three-bed semi round the corner, extended kitchen, sold eight months ago for £289,000.
• C: three-bed semi on your street, needed full modernisation, sold two months ago for £242,000.
• D: three-bed detached half a mile away, sold last month for £340,000.

D is a different property type, so leave it out. C needed a lot of work, so your home is worth comfortably more. B has a bigger kitchen, so your home is probably worth a little less. A is the closest match, and your garage adds something.

A sensible conclusion is somewhere around £270,000 to £280,000, with A as the anchor. Notice that no formula produced that. It’s a reasoned judgement from evidence, and anyone can follow it.

Reading the comparables on a valuation

When any valuation comes with comparables, ask:

1. Are they the same type? Detached sales propping up a semi’s valuation is a red flag.
2. Are they recent? If the newest is two years old, the figure relies heavily on time adjustments.
3. Are they nearby in a way buyers care about? Same streets and same schools beat straight-line distance.
4. Are they sold prices? If an agent’s evidence is mostly asking prices, push for sold prices.
5. Do the adjustments make sense? If your home is smaller than every comparable but valued above all of them, ask why.

Where to find sold prices

HM Land Registry publishes Price Paid Data free online, and most property portals show sold prices for each street drawn from it. You can also buy a copy of a property’s title register from HM Land Registry for a small fee, which shows the last price paid where it’s recorded.

For floor areas, look up the Energy Performance Certificate for each comparable on the government’s EPC register. Comparing price per square metre across similar homes is one of the quickest ways to sanity-check a valuation.

The short version

Good comparables are similar homes, close by, sold recently on the open market. Use sold prices, not asking prices. Adjust for time and for real differences. If you can follow the reasoning from the comparables to the figure, you can trust it. If you can’t, ask more questions.

For how comparables feed into automated estimates, read how house prices are estimated.