AI Valuations – are they damaging the Swindon Property Market?

From diary management tools to chat-bots on agency websites, and even tools that are helping agents to craft compelling property descriptions, AI-based technology solutions have slipped into estate and letting agency systems and processes, largely (although, not always) to the benefit of agents, sellers, landlords, buyers and tenants.

Nevertheless, there is a worrying rise in the use of one particular type of AI tool, which could have real impacts on the market – and not for the better.

The Rise of AI-Assisted Property Valuations

AI-assisted valuations are apparently becoming standard for many in the estate agency industry.

We’re not technophobes here at The House Group – we know that good estate agency means good use of new technology. But this is a growing trend that we find concerning for the property market in Swindon (and beyond), particularly because we suspect that homeowners may be none the wiser – or worse, they may think that such ‘valuations’ are gospel themselves.

A recent survey by Alto, part of the ZPG (i.e. Zoopla) group, has revealed that almost 4 in 5 estate agents now “rely heavily” on ‘Automated Valuation Models’ – or ‘AVMs’. That is an industry seemingly moving, en-masse, towards using automated systems to price what is usually someone’s most valuable asset.

How AI Tools Can Get It Wrong

The problem seems glaringly obvious, but let’s take a moment to spell it out:

AI tools don’t know your home.

They can’t understand that the garden you have invested so many hours (and fingernails) on is going to be the cherry on top for that family looking for beautiful outside space with room for their children to play.

They don’t recognise the appeal of those treated original floorboards, or the functional benefit you have achieved since you opened the Kitchen into the Dining Room.

They certainly won’t account for the intangible value of living near a local school that has risen from ‘Requires Improvement’ to ‘Outstanding’ over the past two Ofsted Inspections, or the excitement of living near that community-led high street since two new restaurants and a deli opened over the past couple of years.

These tools are built on algorithms and trained on data… but they are blind to nuance.

Estate Agents Know These Tools Are Flawed – But Still Use Them!

Let’s be fair and say that AI itself is not at fault here. These tools – and of course, tools are all they are – are not claiming to be accurate.

They claim to be useful assistants, research aids and guides; but many agents are relying on them like some sort of valuation almanac, and the consequences are clear when there are thousands of pounds at stake for homeowners.

In fact, remarkably, according to Alto’s survey almost 90% of agents say they believe AI tools are consistently undervaluing homes. And yet, 78% still say they use them as a primary guide for pricing.

It is a contradiction that speaks volumes (and screams: look out!)

The Local Impact for Property Valuations in Swindon

Here in Wiltshire, we’re seeing the impact of that approach on the local property market.

We have seen one or two properties hit the market locally in recent months that should have commanded so much more in our view, but were brought to market at a price that risked underselling them. Hopefully it was strategic. Hopefully those agents generated multiple bids and exceeded their lower-than-market value asking prices; but what if they did not?

When that happens, it can do more than simply knock a few thousand pounds off a seller’s price; it can also distort general buyer perception, devalue a street or a neighbourhood, and damage things for those that follow later.

It can create a ripple effect across a whole local market.

This is the danger we see if an industry turns evermore to an algorithm as a quick and easy alternative to human experience and professional judgment.

How The House Group in Swindon Approaches Valuations Differently

At The House Group, of course we take a different approach to property price appraisals.

Yes, naturally we make use of technology; it’s a valuable tool to have in the box.

But we approach our use of it knowing that it’s not likely to present a full picture. It is never going to replace experience and professional research.

When we carry out what the industry typically calls an ‘appraisal’, we treat it very much as a consultation. We don’t just research the market, and we don’t just look at your home in detail; we also ask questions – and most important of all, we listen to your answers. It is a holistic process, and one that we treat seriously because it becomes the foundation upon which the success of your move is built.

We Look at What AI Can’t See

We look at the things that an artificially intelligent program can’t work out from checking data generated from inputting a postcode and combining it with an algorithm. Rather than simply hitting a button to spawn a formulaic valuation calculation, we look analytically and thoughtfully at the things that are going to inspire emotional responses from buyers:

• What’s the feel of the space itself? Open or flowing layouts, light spaces and day-to-day functionality all affect a potential buyer’s appetite for a property.
• What condition is the home in? Has the property been left to deteriorate without upgrades or basic maintenance? Or, has it been improved, decorated or modernised compared to other properties being marketed right now?
• Have you invested in the details? Have there been value-adding improvements made that AI Valuation Tools aren’t going to account for? A new kitchen, a bathroom upgrade, perhaps an extra bathroom or an extension? How about a landscaped garden? These can add more than just cosmetic appeal. High-end, classy and modern finishes, thoughtful extensions, or a properly fitted home office – whether that be inside the home or detached in the garden – are all increasingly important to modern buyers.
• What’s happening in the neighbourhood? New developments, improved transport links, good local schools – or indeed new schools and infrastructure, sports facilities, etc; even the buzz around an emerging high street that has surprised locals by how far it has ‘up and come’… these things all impact value, because they determine where buyers are excited (or otherwise) about spending their money to get into.

Combining Research With Real Market Insight

We take these points, some tangible and some intangible, and we consider them in light of what we can determine from professional, thought out research into local sold prices, length of time properties may have languished on the market (and at what price), and of course we look at current market demand – and by that, I mean, crucially, that we apply our knowledge and understanding of what our buyers on our database are actively looking for right now.

And this is all because we’re not a faceless, inhuman brand. We’re a family-run, hands-on outfit, dedicated to our local market because we are dedicated to our family name brand and the values that represents – to us and to the local Wiltshire housing markets.

We know who’s looking. We know what they want. We know how quickly the right home, priced properly, can fly off the market, if it is marketed properly to the right, willing and able purchasers.

We know how to position homes in a way that connects with real people; we don’t just want to tick boxes on a CRM system and let technology take care of the rest. It’s about thoughtful marketing, targeted advertising, real phone calls, real conversations, and motivated, credible viewings.

AI Should Support – Not Replace – Good Local Estate Agents in Swindon

When it comes to pricing your home, AI tools can give you – or the agent you call out – a ballpark figure. But they won’t catch the little things that spark emotion in a buyer. They won’t call the person met two weeks ago who’s been searching for a home just like yours and missed out twice. And they won’t make sure the photographs, the wording, and the presentation of your home are aligned to maximise its value.

That’s our job, and that’s what great agency requires – and we take it absolutely seriously.

Don’t Let AI Undersell Your Home

Of course AI is here to stay. And when used properly and wisely, with consideration and oversight, it can be a great support. But relying on it too heavily is like confusing the Sat Nav in your car with the Auto Pilot in a plane.

Sat Nav doesn’t work that way – it still requires a human being at the wheel to get you there.

If you’re thinking about selling and have had a valuation that just doesn’t sit well with you, AI might just be the culprit.

Make sure the agent you talk to is backing up their advice with demonstrable research, and shows that they have both insight and property market instinct. They should radiate experience – because when it comes down to it, data can be dazzling and statistics can be startling, but usually I find that it is the human touch that carries a sale through.

When it comes to your home, you deserve more than just an address-entry followed by the click of a button to determine its value.

Those in this industry that resort to it are at genuine risk of losing the essence of what it is to be an estate agent.