A PropTech company is suggesting that property mis-measurements and resulting over-valuations may be the next PPI scandal.
The firm - Spec, which specialises in property measurement - may have a vested interest but it claims details are so inaccurate that properties have been mis-sold by an average £33,800.
And it says that a poll of over 2,000 people have shown overwhelmingly that property size, combined with the effect on price, are highly important factors in their decision whether to buy a property.
The survey goes on to say that 92 per cent of respondents believe estate agents should by law be obliged to provide accurate measures and some 45 per cent say they would expect compensation if the property they purchased did not measure up to the details on which they made their decision.
“It’s incredible that the biggest consumer scandal in this country has been routinely ignored by both government and regulators. Given the importance of property size, standardising the way homes are measured should be a key focus for both the industry and consumers alike” claims James D Marshall, chief executive of Spec.
He is sharply critical that the recommendations put forward at the start of the summer in the Regulation of Property Agents: Working Group report - regarding the training, licensing and regulation of estate and letting agents - did not include issues surrounding property mismeasurement.
“Consumers are being routinely misled across the industry. We know that measurements are undertaken by photographers with neither the necessary training nor the required equipment” he claims.
“These measurements are then included in property reports and promoted on property listing sites on a price per sq ft basis, despite admitting in their fine print that the figure indicated should not be used for valuation purposes.
“This means that customers are purchasing properties based on incorrect measurement data, which then impacts EPC ratings, stamp duty and ultimately the cost of purchasing, owning and running a home,” Marshall added.
Spec claims around one in eight properties in its study had an area discrepancy of at least 100 square feet; the average discrepancy across all properties was 54 square feet and in around 60 per cent of cases, floor plans over-stated the size of the properties. Spec's public survey of attitudes consisted of 2,110 adults questioned in July.
.png)
.jpg){kind=logo}
.png)
Join the conversation
Jump to latest comment and add your reply
What a load of rubbish and a desperate article. So Mr and Mrs buyer are so stupid that they only buy by working out price per sq ft do they? 99.9% don't have a clue even how big their own house is in sqft or care. I even had an RICS surveyor refuse to alter a valuation which had a 25% difference between external and internal claiming it's the wall thickness...doh, of 1.3m wide! In fact most floor plans are produced by EPC surveyors, not even estate agents. Do your readers a favour and delete this article.
Totally agree with Mr Blackmore.
Try investigating the Equity release scam that is going on at the moment - that has to be the next PPI Scandal .
I did not like the implication as well that photographers cant measure - like yeah there stupid!
This company bleats on and on about transparency, clearly the new "proptech" buzzword, but unfortunately doesn't publish its prices on its website, presumably so it can negotiate the highest price it can from each client. Not very transpaent really. It all seems a little hypocritical to me...just because they have a new camera that may, possibly find a discrepancy of 0.005sqm. It amazing to see how EVERY proptech company seems to feel the need to have a go at agents and effectively accuse them of incompetence or dishonesty. Do you think it may at some time be worth actually working with agents as friendly symbiotic businesses rather than as lying cheating enemies? With this company effectively accusing my business of being just that why would I even think of using their services? Go away and get a bit of humility and finally work out that not all agents are stiffing their clients, and actually that their software/camera/digital service is not what it is cracked up to be.
I am an RICS Surveyor. I worked for years in Central London where the rate PSF was commonly over £2,000 psf. These are three reasons why this article does not represent a real problem:
1. I check measurements carefully and very rarely find a significant discrepancy between my calculation and that of the floor plan company.
2. Without case law, it's too early to know whether over stating the floor area is likely to yield a single valid claim, let alone a torrent of them as with PPI.
3. Valuations are carried out with reference to the sales of other comparable properties. So if overstating the floor area is common, both the comparable sales and the sale in question will be valued on the same basis. There is only a problem if overstating the floor area is rare and therefore the comparable sales are accurate and the sale in question is inaccurate.
Despite these sound points, I will now pose a counter-argument. Property prices are falling. When values fall, bank repossessions increase and banks are likely to lose money. By default, they sue valuers. Whether the valuer is wrong or right, that's what the banks do in a down-turn. They do this because the valuers professional indemnity insurers would rather pay a settled amount that pay for expensive court proceedings. This overstating the floor area will give the banks more ammunition.
But it's still not a PPI style floodgate.
Sorry for the long reply, hope you are still awake!
So that's a no then, glad we cleared that up for you Spec. You'll have to find another way to parasitically glean an income from our industry.
"Every care has been taken with the preparation of these Sales Particulars but they are for general guidance only and complete accuracy cannot be guaranteed..."
Ah! The equity release scam! Come on EAT - we needs the full works done on this one.
Please login to comment