How the best investors are using the land registry to find their next investment property

How the best investors are using the land registry to find their next investment property

Posted by Nello Team on April 1, 2015April 3, 2015

While the old adage “location, location, location” may be true for finding the best property, when it comes to investing your money, you are aiming for the highest return possible. That means you need to buy at the best price. But when it comes to negotiating price information is king. Here we look at the best and most reliable source of house price data: the land registry.

The flawed way of evaluating property price

Many beginner property investors act like regular house buyers when searching an area for investment properties: they look in estate agents’ windows. They speak to a few agents and ask them for their views on the market. This is the wrong thing to do because:

  • Prices on property display boards are asking prices
  • Estate agents – on commission – have a vested interest in getting the highest price possible

Your mission as a property investor should be to:

  • Find the best location
  • Buy the best property possible within your budget
  • Buy at the cheapest price possible (we’ll call this the right price)

The land registry is property investor’s best friend

When a property is sold, the sale has to be reported to the land registry. This is a government body set up to register the ownership of land and property in England and Wales. For the government, the data it collects helps to assess property values for tax purposes. For the property investor, it is far more useful.

The data that the land registry collects includes:

  • Address
  • Price paid
  • Date of sale
  • Property type
  • Freehold or leasehold

On the land registry website, a property investor can search for actual sold prices of properties. Data goes back to 1995. Even better, the investor can use the price calculator tool on the land registry website to show the price he or she should pay today.

How to use the land registry website and never overpay for property again

1. Go to http://landregistry.data.gov.uk

2. Enter the details of the property you are considering buying (postcode, street, or address). Let’s say you want to invest in Kingston upon Hull – enter the postcode HU1.

3. Click “Search”

Let’s say you are interested in making an offer for 1 City Exchange. It is currently for sale at £135,000, and you see the last time it was sold was in April 2007 at £138,000. The estate agent has told you this already, and said that he believes you could strike a deal at a ‘bargain price’ of £130,000.

4. Now go to the Price calculator tab, and key in the following details

  • Property value (price paid) on last sale – in this case £138,000
  • Date of sale (purchase) – April 2007
  • Date of estimate value – the most up to date available, in this case June 2015
  • Location – in this case, the council of East riding of Yorkshire

5. Then click on ‘Calculate’

6. Scroll down, and see the estimated value, based on the latest actual sold prices in the area. This is a far better estimation of what you should be paying for the property – though if any modernisation work or extensions have been added you’ll need to take these into consideration.

In our example, the right price for the property is £120,853; that £130,000 offer suggested by the estate agent doesn’t look such a bargain now.

Learn to use the land registry, and never again pay the wrong price as a property investor.

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