Daydreaming of selling up and buying a bigger home? It could become a reality, with 45% of homeowners undervaluing their home by an average of £46,300, our research shows.

Almost half of UK homeowners are undervaluing their home, with their properties worth nearly £50,000 more than they realised.

Only three out of 10 people have an accurate idea of how much their home is worth, with 45% undervaluing and a quarter overvaluing their property, according to our inaugural Hidden Equity Survey.

Those who underestimated the value of their home discovered it was worth £46,305 more than they thought, which equates to roughly 1.5 times the average UK salary. Meanwhile, those who overvalued it were out by around £44,313.

Nearly one in 10 homeowners whose property was worth more than they expected found that it was valued at over £100,000 more, with 40% of these located in London and the south east.

At a national level, this means that more than one million UK properties could be carrying six figures of hidden equity – unbeknown to their owners.

When all the survey results were taken into account, the net result was that the average home is worth £9,470 more than its owner realised, meaning UK homeowners are collectively sitting on a staggering £237bn of hidden equity.

What does the picture look like in London?

Some 35% of London homeowners found their property to be worth more than they expected, by an average of £117,000.

Conversely, a similar amount – 37% – said their home was worth less than they thought, by an average of £49,000. Meanwhile, 28% of homeowners said the value was in line with what they expected.

When all the survey results were taken into consideration, the average home in the capital is worth £22,846 more than its owner anticipated. To put this into context, that’s more than double the £9,470 national average.

What impact did hidden equity have on homeowners?

The research, which was based on homeowners who had their home valued via an estate agent or sold it in the past three years, highlights the significant gap between how much people think their home is worth and what it really is.

Nearly a third of people whose home was worth more than they realised said they were overjoyed, while 6% described it as feeling like they had won the lottery.

Among those who went on to sell their home and benefit from the hidden equity, the unexpected windfall had a significant impact, with 81% saying the additional money had enabled them to improve their lifestyle.

Exactly half said they were able to move to a better property than they had expected, such as one with more bedrooms or in a nicer area, while 18% of those aged 55 to 64 said they could retire earlier. For those able to retire earlier than expected, it was on average by more than three years.

Around 13% said it had enabled them to upgrade their car, with the same proportion going on more holidays and 8% using the money to help their children get onto the property ladder.

For the seven in 10 homeowners who did not know the true value of their home until they got it valued by an estate agent, 45% said they would have made different financial decisions in previous years if they had been aware of their hidden equity.

Nearly half of those again – 21% of respondents – said they would have made ‘significantly’ different decisions.

Some 31% of homeowners whose home was worth less than they expected said they would have worked harder to build up their savings if they had known the true value of their property, while 12% said they would have put more money into their pension. Others said they would have spent less on holidays, cars and luxury items.

What could this research mean for you?

Our survey shows that many homeowners may be in for a nice surprise if they check the current value of their home.

There are significant benefits to knowing exactly how much your home is worth, particularly if you are thinking of selling it, as its value could impact the type of property or location you look to move to.

The supply of homes for sale is tight, so if you list your home now it will not only stand out, but you will also be in a good position to take advantage of the stamp duty holiday on your next step on the housing ladder.

Head of research at, explained: “The effects of the pandemic over the last 12 months have been felt in the housing market, with many households reassessing how and where they want to live.

“There is soaring buyer demand but this is not currently being matched by homes being listed for sale. Homeowners considering a move could be in pole position in their local market if they offer their property for sale, and could be set to unlock hidden equity.”

Top three takeaways

  • More than half of homeowners undervalue their home, with their properties worth nearly £50,000 more than they realise
  • Only three out of 10 people have an accurate idea of how much their home is worth, with 45% undervaluing and a quarter overvaluing their property
  • Nearly one in 10 homeowners found their home was worth more than £100,000 more than they thought, with 40% of these properties located in London and the south east