What is a fair price for a London property?
A fair price is not an opinion — it is a calculation from sold data, floor area and the House Price Index. Here is the method, step by step.
"Fair price" sounds like a judgement call. It is not. It is a calculation, and once you have seen the method you can do a rough version of it yourself on any property in England or Wales.
The logic is simple: find out what buyers actually paid for similar homes nearby, work out what that was per square metre, adjust for how the market has moved since, then multiply by the size of the property in front of you.
The four inputs
1. Sold prices, not asking prices
HM Land Registry records the price paid for every completed residential transaction in England and Wales. That is the foundation, and it matters that it is completed transactions rather than listings — an asking price is what someone wanted, a sold price is what someone actually paid.
The data is public and free. It is also, usefully, not something an estate agent can spin.
2. Floor area from the EPC register
Every property marketed for sale needs a valid Energy Performance Certificate, and each certificate records total internal floor area in square metres. This is what converts a sold price into a sold price per square metre, which is the only basis on which two different properties can be sensibly compared.
This step is also the reason some listings cannot be valued. No verified floor area, no reliable per-square-metre figure.
3. The UK House Price Index
A comparable that sold fourteen months ago sold into a different market. The UK House Price Index, published monthly by HM Land Registry and the ONS, measures price movement at local authority level. Applying it brings older comparables up or down to present-day terms.
Without this adjustment, valuations drift — they either lag a rising market or overstate a falling one.
4. The subject property's own floor area
Finally, multiply the adjusted local rate per square metre by the floor area of the property you are actually considering.
The formula:
Fair price = (local sold price per m² × HPI adjustment) × property floor area
A worked example
Suppose you are looking at a two-bedroom flat in south London with a floor area of 72 m², on the market at £595,000.
- Comparable flats within a few streets sold at an average of £7,400 per m² across the last eighteen months.
- The local HPI shows flats in the borough are up 3 per cent since the midpoint of those sales, so the adjusted rate is £7,622 per m².
- £7,622 × 72 m² = £548,784.
The fair price is roughly £549,000 against an asking price of £595,000 — a gap of about £46,000, or 8 per cent above market. That does not mean the flat is a bad buy. It means you now know you would be paying an 8 per cent premium, and you can decide whether the property's specific qualities justify it, or open a negotiation with evidence behind you.
What the calculation deliberately does not include
Being clear about the limits is what makes the number trustworthy. A fair price built from sold data and floor area cannot see:
- Condition. A gutted wreck and a finished home of identical size look the same to the data.
- Outside space. Gardens, terraces and balconies are not counted in internal floor area but clearly carry value.
- Lease length. A flat with 68 years remaining is worth materially less than the same flat with 950 years, and the gap widens the shorter the lease gets.
- Aspect, floor and outlook. Top-floor dual-aspect versus lower-ground facing a wall.
- Micro-location. One end of a long road can be quite different from the other.
So treat the fair price as the starting benchmark, then reason explicitly about which of these factors apply and in which direction. A property at 6 per cent above fair price with a large garden and a 999-year lease may well be sensibly priced. A property at 6 per cent above fair price with a 74-year lease is a different proposition entirely.
Why portals do not show you this
It is worth being blunt about the incentives. The major property portals are paid by estate agents, who are paid by sellers. A prominent label saying a listing is 9 per cent above market value would be actively hostile to the customer paying the bill.
That is not a conspiracy, just a business model. But it does mean the burden of working out value falls on the buyer, which for most first-time buyers is the person in the transaction with the least experience and the most at stake.
Frequently asked questions
What is a fair price for a property?
A fair price is what comparable properties in the same area actually sold for, expressed per square metre, adjusted for market movement since those sales, and multiplied by the floor area of the property you are looking at. It is an evidence-based estimate of market value rather than an opinion about what a home is worth.
Is a fair price the same as a mortgage valuation?
No. A mortgage valuation exists to protect the lender by confirming the property is adequate security for the loan, and it usually happens after your offer has been accepted. A fair price estimate is for the buyer, before offering, and answers a different question: is this asking price reasonable against local evidence.
Why do some listings not have a fair price?
The calculation depends on a verified internal floor area, which comes from the EPC register. Where no valid EPC floor area exists, there is no reliable way to work out price per square metre, so no fair price is shown. Showing an estimate built on a guessed floor area would be worse than showing nothing.
Can a property be worth more than its fair price?
Yes. A fair price is a benchmark derived from local sold data and floor area. Features that data cannot see, such as a large private garden, exceptional light, a share of freehold or a recent high-quality renovation, can justify paying above the benchmark. The point is to know that you are paying a premium and why.