Price per square metre: the number that exposes overpricing
The single most useful number in property, and the one portals never show you. How to calculate it and what a good figure looks like by area.
Ask someone what a flat cost and they will tell you a price. Ask a surveyor and they will tell you a price per square metre. That difference is most of what separates informed buyers from everyone else.
Price alone is not comparable between properties. Price per square metre is. It is the property equivalent of a unit price on a supermarket shelf, and for reasons that are not accidental, it is almost never displayed on a listing.
The calculation
Divide the price by the internal floor area in square metres.
£520,000 ÷ 65 m² = £8,000 per m²
That is the whole method. The difficulty is never the arithmetic, it is getting a trustworthy floor area — and then being disciplined about comparing like with like.
Why it exposes overpricing so effectively
Consider three flats, all marketed as two-bedroom, all in the same postcode:
| Flat | Asking price | Floor area | Price per m² |
|---|---|---|---|
| A | £565,000 | 78 m² | £7,244 |
| B | £549,000 | 63 m² | £8,714 |
| C | £575,000 | 80 m² | £7,188 |
On headline price, Flat B looks like the value option — it is the cheapest of the three. On price per square metre it is dramatically the most expensive, roughly 20 per cent above the other two. A buyer choosing on price alone would pick the worst deal on the list and feel prudent doing it.
This is not a contrived example. "Two-bedroom flat" covers an enormous range of actual sizes, and the bedroom count is what buyers filter on.
Getting a floor area you can trust
The EPC register is the best free source. Every property marketed for sale in England and Wales must have a valid Energy Performance Certificate, and each one records total floor area in square metres. It is searchable by postcode on the government EPC service.
Two cautions. First, EPC floor areas are measured by an assessor and occasionally contain errors — if a figure looks obviously wrong against the floor plan, treat it with suspicion. Second, EPC measures internal heated space, so it excludes gardens, balconies, terraces, and usually unheated outbuildings and garages.
That second point is the metric's main blind spot. A house with a 30-metre garden and a house with a paved yard can have identical internal floor areas and very different values. Price per square metre will not see the difference, so you have to.
Comparing like with like
For the number to mean anything, your comparison set has to be tight:
- Same property type. Flats and houses trade at different rates per square metre in the same street — flats are usually higher, because the land component is shared.
- Same rough area. Same postcode ideally, same street where you can get it.
- Recent enough. Within about 18 months, adjusted for market movement if older.
- Similar tenure. A short lease depresses the rate substantially and will drag your benchmark down if you mix it in.
Small properties cost more per square metre
This is worth internalising, because it causes a lot of misreadings. Smaller homes almost always trade at a higher rate per square metre than larger ones in the same area. A studio might run 25 per cent above the local average rate; a large family house might sit below it.
The reasons are structural: there is a fixed value in simply having a front door, a kitchen and a bathroom regardless of size, and the buyer pool for smaller, cheaper properties is larger. So when a one-bedroom flat shows a high rate per square metre, that is not automatically evidence of overpricing — compare it to other one-bedroom flats, not to the area average across all sizes.
What a sensible workflow looks like
- Get the asking price and the EPC floor area for the property.
- Calculate its asking rate per square metre.
- Pull sold prices for similar-sized, same-type properties in the postcode over 18 months.
- Calculate the median sold rate per square metre for that set.
- Compare. A gap above about 10 per cent needs a specific justification.
If you would rather not do this by hand for every property you view, it is precisely the calculation HomeSignals runs automatically on every valued London listing — the verdict on each listing is the output of exactly this comparison.
Frequently asked questions
How do you calculate price per square metre?
Divide the property price by its internal floor area in square metres. A flat priced at £520,000 with a floor area of 65 square metres works out at £8,000 per square metre. Use internal floor area from the EPC register rather than an agent's estimate, and be consistent about whether outside space is included.
Where can I find the floor area of a property?
The Energy Performance Certificate register records total internal floor area in square metres for every property marketed for sale in England and Wales. You can search it free by postcode on the government EPC service. Floor plans in listings also state dimensions, but these are supplied by agents and are not independently verified.
What is a good price per square metre in London?
There is no single figure, because London varies enormously by area. Prime central boroughs can run several times the rate of outer London. What matters is not the absolute number but how a specific property compares to recent sold prices per square metre within the same postcode, for the same property type.
Does price per square metre include the garden?
No. Floor area from the EPC register measures internal heated space only, so gardens, balconies, terraces and most outbuildings are excluded. This means a property with substantial outside space will look expensive on a price per square metre basis, which is why the metric should be read alongside what the property physically offers.