Comparable evidence in property valuation

What comparable evidence is

Every property valuation rests on comparable evidence. The principle is simple: a property is worth what a willing buyer will pay, and the best indicator is what buyers have actually paid for similar properties recently. This is not just common sense -- RICS Valuation Standards (the Red Book) mandate that valuers must have regard to comparable evidence when assessing market value.

The hierarchy of evidence

Direct comparables: Properties virtually identical in type, size, condition, and location that sold recently. A flat in the same block that sold last month is about as direct as it gets.

Adjusted comparables: Similar but not identical properties where the valuer makes quantified adjustments for differences. The skill of valuation lies largely in making these adjustments defensibly.

Other evidence: General market data, indices, asking prices. Useful for context but should not be the primary basis if better evidence exists.

How surveyors select comparables

A good surveyor defines search parameters: same property type, similar size (within 20% of floor area), same tenure, same general location. They search for transactions within the last 6-12 months.

Common adjustments include size (larger properties tend to have lower per-square-metre rates), condition (recently refurbished vs needs updating), lease length (RICS relativity graphs quantify this), and time (adjusting for market movement using house price indices).

The manual process

Start with Land Registry Price Paid data for transactions in the relevant postcode sector -- this gives addresses, prices, dates, and property types, but not floor areas. Cross-reference with EPC records for floor area data. Check with local agents for recent sales not yet in Land Registry. Compile everything in a spreadsheet with adjustments.

This process works but it is slow, labour-intensive, and prone to inconsistency. Two surveyors valuing the same property will select different comparables and potentially arrive at materially different values.

Common pitfalls

Selection bias. Surveyors acting for vendors tend to select higher comparables. Surveyors acting for purchasers select lower ones.

Insufficient adjustment. Using a new-build comp to value a period property without adjusting for the new-build premium produces misleading evidence.

Over-reliance on asking prices. Asking prices are evidence of aspiration, not value. The gap between asking and achieved prices varies by area and market conditions.

Too few comparables. A valuation based on two or three comparables is fragile. If one is a distressed sale, the entire basis is compromised.

Assembling comparables this way is what MarketCode's valuation skill does: comparable sales from the registered record, with floor areas from the EPC register, adjusted and shown beside the estimate.