There was huge excitement in the newspapers last week.
Rightmove announced which were the most expensive streets in the UK.
The top 10:
- Winnington Road, N2
- Chester Square, Belgravia
- The Bishop’s Avenue, N2
- Thurloe Place, South Kensington
- East Road, Elmbridge, Surrey
- Ebury Square, Belgravia/Victoria
- Knightsbridge SW1X (Knightsbridge is a road in Knightsbridge)
- Wilton Place, Belgravia
- Montpelier Square, Knightsbridge
- Cumberland Terrace, Regent’s Park
Of course, this list is complete nonsense because it is based on the asking prices of properties on Rightmove. And, unfortunately, Rightmove doesn’t list every property on the open market, let alone off-market properties.
And at the very top end of the market, i.e. the most expensive houses, they are almost never openly sold. Indeed, I frequently have to sign NDA’s on properties I source for clients.
But even leaving aside off-market properties, what do they mean by expensive? In Winnington Road, there are a lot of houses for sale with all but one being under £1490 per square foot (£16,035 per square metre).
Compare that to Grosvenor Square in Mayfair (Mayfair noticeably missing in the list above) where several apartments have sold for over £6000 per square foot.
Now, price per square foot valuations are a blunt instrument and can be incredibly misleading – rather like investing in a company just using the P/E ratio – but in this instance blunt highlights the pointlessness of the Rightmove list.
So why would they publish it? Because while the information is useless and dangerously misleading for buyers, it is fantastic PR for Rightmove.
This is something to keep in mind when reading statistics or “facts” on property (or any subject for that matter).
An excellent book on this is The Tiger That Isn’t: Seeing Through a World of Numbers written by Andrew Dilnot and Michael Blastland:
“Numbers have become the all-powerful language of public argument. Too often, that power is abused and the numbers bamboozle. This book shows how to see straight through them – and how to seize the power for yourself.
Public spending, health risks, environmental disasters, who is rich, who is poor, Aids or war deaths, pensions, teenage offenders, the best and worst schools and hospitals, immigration – life comes in numbers. The trick to seeing through them is strikingly simple.”
It is genuinely frightening how many buyers overpay for property because they are fooled by statistics and comparators that seem accurate and credible but are the polar opposite.
The good news is this: Once you understand how to accurately value property, you’ll spot the traps and inaccurate “facts” before they cost you money.
