How to judge whether a property is a genuine comparable

A comparable is a snapshot of what a buyer paid at a moment in time, and the further that moment recedes, the less it says about today. Markets rise and fall, sometimes quickly, so a sale from years ago may sit well above or well below what the same property would fetch now. Recent sales, ideally within the last six to twelve months, need little or no adjustment for market movement; older ones need a deliberate adjustment using an index such as the UK House Price Index for the area, and every adjustment adds uncertainty.

There is also a lag built into the record itself. Sold prices reach HM Land Registry weeks or months after completion, and the price was typically agreed months before that, so even the freshest registered comparable describes a deal struck some time ago. In a fast-moving market that gap matters, and it is one reason a pool of several recent comparables beats reliance on any single one.

In thin markets you will sometimes have no choice but to reach further back. Do it knowingly: adjust for the market movement since, widen your stated range, and treat the resulting valuation with the caution old evidence deserves.

Distance earns its place in the tests because property markets are intensely local: a school catchment boundary, a busier road, a change in housing stock or a postcode's reputation can shift values within a few hundred metres. A comparable from the same street or an adjacent, near-identical one usually shares those conditions with your property; one from a mile away may not, however similar the house itself looks on paper.

But proximity is a proxy for sameness of micro-market, not a guarantee of it, and it is the weakest test to rely on alone. The renovated house two doors down that sold last month is an excellent comparable; the house across a main road in a different catchment can be a poor one at a tenth of the distance. When you must choose, a true match on type, size and condition slightly further away generally beats a poor match next door. Judge whether the comparable's street genuinely trades like yours, and if it does not, adjust or discard it however close it is.

Buyers shop by bedrooms, so matching the bedroom count is the natural first cut, and a comparable with a different bed count needs a good reason to stay in the pool. But bedroom count is a coarse measure: a generous two-bed can be larger than a cramped three-bed, and an extra bedroom carved out of the same floor area does not add the value a genuinely bigger house carries.

Floor area is the sharper test. Check it rather than assuming it, using the EPC register, which records floor area for most of the housing stock, and compare on price per square foot as a cross-check when sizes differ. A comparable close on area but one bedroom out is often more honest than one matching on bedrooms but far apart on size. Where a comparable is materially larger or smaller, adjust its price accordingly or leave it out.

A flat, a terraced house, a semi, a detached house and a bungalow are different products with different buyer pools, even at identical floor areas and bedroom counts. They carry different tenure patterns, different outside space, different service charges and different demand, so their prices do not move together street by street. A flat is not a comparable for a house, and stretching across type families is one of the fastest ways to contaminate a pool.

Stay within the family, and respect the finer divisions when the market does: a purpose-built flat and a converted flat price differently in many areas, as do a mid-terrace and an end-terrace, or a true bungalow and a chalet conversion. Matching type honestly usually costs you comparables, and that trade is almost always worth making: a smaller pool of true matches gives a more trustworthy figure than a bigger pool of lookalikes.

Condition at the point of sale moves value substantially, and it is the test most often skipped because it takes work: you have to find the original listing and read the photographs. A comparable that sold fully renovated tells you about renovated values; one that sold tired tells you about unrenovated values; and using one to evidence the other builds a systematic error into your figure. Sort every comparable by the condition it sold in, and compare like with like, renovated against renovated, tired against tired, or adjust explicitly when you cannot.

Then insist on sold prices. An asking price is a marketing decision that many properties never achieve; sold prices registered with HM Land Registry are what buyers actually paid. Asking prices and price cuts are worth watching as sentiment, they tell you where sellers are testing the market and how it is responding, but they are not evidence of value, and a valuation built on them inherits their optimism.

Take every sale within half a mile and average it, and you get a number that looks rigorous and describes nothing. The blend mixes renovated with unmodernised, flats with houses, your street with better and worse ones, and last month with two years ago. Its median sits somewhere between all of them, a price no buyer paid for anything like your property in its actual condition. Worse, the number is unstable: a run of renovated sales or a couple of large detached houses drifting into the radius moves it, without anything about your property changing.

The order of operations is the whole fix: filter first, then average. Strip the pool down to genuine matches on type, size, condition and recency, adjust the survivors for their remaining differences, and only then take a middle figure. A median of five true comparables is evidence; a median of fifty mixed sales is noise with a decimal point. When someone shows you an area average as proof of a specific property's value, the polite question that matters is: a median of what, exactly?

Even a well-filtered pool rests on evidence with known blind spots, and an honest appraisal names them rather than pretending precision. None of these limits makes desktop comparables worthless; together they are the reason a comparables-based figure should be carried as a range with a stated confidence, and why anything unresolvable from a desk belongs on the viewing checklist.