Rightmove, you're the estate agents aren't you?
Rightmove and Savills have been working closely together for many years. In recent times the working relationship has expanded and in particular we have enjoyed a very fruitful working relationship in the Affordable Housing Market. This work has been predominantly in the area of data driven property valuation, with Savills clients benefitting from its strategic partnership with Rightmove, and access with access to the Automated Valuation Model (AVM) and other products. Savills clients have gained significant advantage from this partnership. The combination of Rightmoves market leading AVM and Savills proven expertise and experience is formidable.
The upturn in the market and global economic conditions combined with a further round of the HCA’s affordable rent programme, ongoing tenure diversification, and increasing development activity amongst Local Authorities has of course led to renewed interest in property investment and the analysis that sits behind it. Rightmove and Savills have been working on a number of new initiatives to ensure that our customers are best placed to take advantage of opportunities that arise.
Automated Valuation Model (AVM) with 5 Year Forecasts
An AVM is fundamentally a very complex mathematical model that makes use of the available data to produce a statistical valuation of a property. Historically this meant that AVM’s used predominantly Her Majesty’s Land Registry (HMLR) sold price data and possibly some limited third party information about the make up of the location. In 2006 in close collaboration with lenders and surveying firms, Rightmove started to develop its own AVM. We recognised that the data being used in statistical models was often very limited and even worse could often be behind the market (3 to 6 months) which ironically at the time meant that traditional AVM’s were not keeping pace with the market growth.
Rightmove took a clean sheet approach to their AVM design and working in partnership with the surveying industry developed a more accurate, transparent and evidence based valuation model which differs significantly to old style AVM’s. The methodology that sits behind the AVM would take an article by itself to describe, and if any readers would like to discuss this my contact details can be found at the end of this one. However, even the best model will fail if it doesn’t have access to sufficient amounts of high quality, timely data and this is where the Rightmove AVM has a distinct advantage.
We have a dataset of 62 million individual property records which consist of:
- Rightmove ‘for sale’ records
- Rightmove ‘rental’ records
- Rightmove ‘new build’ records
- Rightmove ‘Housing Association’ records
- Chartered Surveyors records from all the UK leading surveying firms
- Asset Managers – re-possession data
- Her Majesty’s Land Registry
- Registers of Scotland
- Experian – ‘Mosaic’ classifications and other data
- Glenigan planning data
- Property News ‘for sale’ records in Northern Ireland
This is probably the largest and most robust dataset available and is a fundamental differentiator of the Rightmove AVM. Much of this information is unique including the rental data for which there is no publicly available equivalent. This therefore gives Rightmove the unique ability to produce an accurate evidence based rental assessment as well as a current market capital and historic sales valuation.
Shortly, we will be adding a new element to the AVM which will allow clients to receive a capital growth forecast for individual properties within a batch valuation. Forecasting is a very complex business and again relies upon having access to the best available data and the ability to analyse and interpret a huge volume of raw information and trends – not just in the domestic economy, but from all around the world. In order to produce the best possible results we have teamed up with Oxford Economics who have an outstanding proven track record and who will be combining their economic forecast data with our housing data and expertise. The end product will be a predicted future 5 year value with an associated confidence level for each year for individual properties within a client’s portfolio.
Development Appraisal Analysis Tool
We are currently in the beta testing phase for a brand new product that will give organisations highly detailed information on property stock, marketing activity, transactional data and market characterictics within a defined area. The analysis will include:
- Floor area comparisons;
- Demographic information on the makeup of the area;
- New build premiums;
- Average values;
- Price per square metre/square foot;
- Properties on the market;
- Properties off the market;
- Sold subject to contract properties;
- Minimum, maximum and average prices of advertised properties;
- Number of sold properties and there minimum, maximum and average prices;
- Information on new build sites in the surrounding area (definable by the user) including pictures of the properties, links to the developers online microsite, types and styles of new build properties, number of bedrooms, and prices of the properties advertised.
The sheer depth of the information will provide invaluable insight for developers and consultancies assessing the potential of a site, the likely return on investment, unit mix, demand, marketing approaches etc. In addition the user will have access to multiple search criteria allowing them to access exactly the information that they need.
Rightmove are continually striving to produce the best products for the industry and I think one of the key reasons why we have been successful is our approach of listening to clients needs when developing new products. This success is driven by dialogue with industry leading companies like Savills who can help us define what the industry wants and needs. If you have any questions or queries please do not hesitate to contact me on 07894 255314 or at firstname.lastname@example.org
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