The volume and intensity of property data within the UK residential property market has become staggering in recent years.
It’s an industry now awash with digital asking price, sale price, property description, location and surveying data, all of which has become available for most of the nation’s 29 million homes.
This has been created, principally, by the rise of property portals and the Land Registry’s decision to offer its house sales and transaction data for free, although other information is coming on board, and rapidly.
“The open data initiative from government including data from the Land Registry and Ordnance Survey means availability has improved immeasurably, which is enabling a lot more innovation,” says Richard Donnell, Research & Insight Director at Zoopla. “It’s a trend that can only continue.”
This includes a variety of existing sources that have been going digital including information from EPC certificates as well as planning, schools, sales, environmental, tenure, ownership and postcode data.
Also, investment in property data has been stimulated by the increasing value of this information to lenders, who are using the this data when checking the market value of more ‘standard’ homes when making lending decisions.
“Valuation surveyors use a combination of local expert knowledge and comparable data sources to determine a property’s current valuation,” says Jayne Coppinger, Account Director at Landmark Valuation Services.
“With the introduction of risk management tools, and introducing additional data earlier in the valuation process in support, mortgage lenders are increasing the use of different valuation types, such as Automated Valuations, Assisted AVM’s and Desktop Valuations.
“With the amount of property-related data that we today have at our fingertips, automated approaches like this are starting to increase in use on mortgage applications that are deemed to be of a lower risk.”
Property data is also being used by estate agents to lure in prospective vendors via ‘how much is your home worth’ platforms, particularly online and hybrid agents such as Purplebricks.
Traditional estate agents use property data heavily too. The blue chip firms all have large research departments which use data to support their businesses in particular to justify charging new homes builders to help them structure and plan development sites financially prior to planning.
But small agents use data too, often to prove – using Zoopla and Rightmove’s data services – that they are the market leader for this kind of property or that area.
The data also has other uses, most famously to create house price indexes including the Rightmove, Hometrack and LSL/Acadata indices, and also to create ‘advice’ hubs for landlords including platforms such as Realyse and Outra.
But while data usage is spreading fast, is anyone stopping to ask about its accuracy?
“There is a lot of data out there and a lot of companies supplying it, so I think many people are wondering which ones, and what, should I believe and what’s the most robust data for my particular requirements,” says O’Donnell.
He says the most useful approach for those within the industry is not to consider what can be done with this deluge of information, but rather ask what they want to know and then interrogate the information to get their answer.
“Then you can find the data needed with the level of accuracy and robustness required to answer the question,” he adds.
The Land Registry is fairly open about its data being less than accurate; a property may be declared as sold at a certain price, but there are several variables that can significantly reduce its accuracy.
These include properties that are sold for less than market price between private individuals, fractionally-owned homes and mistakes by solicitors when inputting an agreed sale price.
Also, the price information is optional – many people including celebrities often ask for the final price not to be included.
The information supplied by portals can be inadvertently imprecise, too. Agents can input the wrong price and details when uploading information via their feeds to the portals and many properties at the top of the market are offered ‘price on application’.
“Accuracy all depends on why you need it and your propensity to pay for quality; you can get incredible accuracy but it will come at a price,” says Donnell.
“I often say to customers that they are sitting on half the answer themselves within their own databases.”
Data can be graded into two categories; raw, relatively un-processed information used to inform marketing material or internal discussions, and data that has been cleaned, curated and had all the junk and noise stripped out.
This more detailed information can be used to work out how to acquire customers, where to open the next branch or development site and how to be smarter about targeting certain types of buyers, for example.
“I think the property industry is sitting on a three out ten for its potential for the use of property analytics to drive things forward,” says Donnell.
“I’m not sure that everyone understands what the accuracy percentages mean; it may sound great to say you’ve got 90% accuracy, but you’ve got to ask the right questions to make it meaningful.”
One relatively new company tackling these challenges is Swirb. Conceived several years ago as a platform to help landlords make better investment decisions, it has recent pivoted to become a valuations data provider.
“Our plan is to spend time gathering data about properties to create the most accurate valuation model in the market,” says co-founder Aaron Robinson.
“We see our valuations supplementing agent valuations as ours will track many aspects of the market in real-time, enabling users to see market trends against the more static agent-based valuations.
“Monetisation is almost certainly going to be a derivative of the valuation; we have no plans to make money from consumers or agents but to work with both to help us to provide better services and to make the market less opaque.
“We have been gathering data for some time; we go to the Land Registry and take the properties that have been sold and then take our data from the day before it was sold and refine our model to get as close as possible to the price that it sold for. We’re improving all the time.”
Swirb claims its accuracy is below 8% in variance within more standardised property markets, and in some cases ‘bang on’, and that overall it has a variance of 12%.
It is not alone in claiming to be an innovator in property data, and there are at least half a dozen companies attempting to achieve the ultimate goal of true accuracy, but it’s still some way off.
Donnell agrees: “We’re on a journey here but there is a big opportunity for this data to help the industry around efficiency, winning new business and converting existing business at a higher rate.”