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What is a fair price for a house? How to work it out yourself
6 min read · Updated June 2026
“Fair price” sounds like it should be straightforward. In practice, it's whatever a willing buyer and a willing seller agree to. But that doesn't mean all prices are equally rational — and it doesn't mean you should accept the asking price as the ceiling of what's reasonable. Here's how to form your own independent view.
Why you can't rely on the asking price
The asking price is set by the seller, advised by an estate agent whose incentive is to win the instruction — not to price accurately. Agents often suggest a higher figure than they believe the property will achieve in order to secure the listing. This is known in the industry as “buying the instruction.”
The result is that many properties are overpriced at listing and then reduce over time. The original asking price is not evidence of value — it's the seller's opening position.
The right method: comparable sales
The most reliable way to value a property is to look at what genuinely similar properties have recently sold for. This is exactly what surveyors and lenders do when they carry out a mortgage valuation.
To do this yourself:
- Find three to five sold prices for similar properties (same type, similar size, same street or immediate area) in the last 12 months
- Calculate the price per square foot for each, using EPC floor area data
- Apply that range to the property you're considering
- Adjust up or down for condition, location within the street, and any standout features
This gives you a range — say, £380,000 to £410,000 — rather than a single number. That range is your fair value estimate. If the asking price sits within it, it's reasonably priced. If it's above the top of the range, you're being asked to pay a premium that needs justification.
Factors that justify a premium
Condition
A recently renovated property in immaculate condition warrants more than a comparable property needing work. The question is how much more — get quotes for the work needed on each before comparing.
Garden size and aspect
South-facing gardens command a real premium in the UK market. A large garden in an area where most properties have small ones is worth paying for — it's genuinely scarce.
School catchment
Properties in catchment for high-performing state schools can command 10–20% premiums in some areas. This is real value — if you have or plan to have children. If you don't, you're paying for something you won't use.
Off-street parking
In urban areas with parking pressure, off-street parking is worth a meaningful premium. In rural areas where parking is abundant, it's less significant.
Factors that justify a discount
- Significant work required — get quotes, not estimates
- Flood risk — affects insurance cost and future saleability
- Poor EPC rating — translates directly to higher energy bills and potential future upgrade costs
- Listed building or conservation area restrictions — limits what you can do with the property
- Busy road, flight path, or overhead pylons
- Short lease (for flats) — lease extension costs can be substantial
The mortgage valuation as a reality check
If you're buying with a mortgage, your lender will instruct an independent surveyor to carry out a valuation. If the property values below your agreed purchase price, the lender will only lend against the lower figure — meaning you'd need to fund the gap in cash or renegotiate.
This is rare in a rising market, but it does happen — particularly when buyers have overpaid in a competitive bidding situation. The mortgage valuation is an external check on whether your price is defensible.
A full structural survey (RICS Level 2 or Level 3) gives you a more detailed condition assessment on top of the valuation. For anything other than a recently built property in obvious good condition, a Level 2 or Level 3 survey is worth the cost.
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