Why it pays to know the value of your house
Even if you're not planning to sell your house, there are several reasons why you should know how much it's worth. Your home’s value will affect how much your home insurance and council tax will cost, and will also influence your remortgage options.
Key takeaways
You’ll need to know your home’s value if you plan to remortgage or sell your home
Your home’s rebuild value is different from its market value and will affect your home insurance premiums
You can usually get a local estate agent to value your home for free, even if you don’t plan to sell
Council tenants planning to purchase through the Right to Buy scheme will need to know their home’s value
According to recent Halifax data, the average UK property was worth £299,138 in January 20251, with typical prices up by 0.7% in January.
Whether you plan to stay in your home, remortgage or move, it’s important to know what your home is worth.
Why you need to know how much your home is worth
There are several reasons it’s a good idea to know your home’s value. These include:
Selling your property
If you plan to move house, knowing your home’s value can help you set a realistic asking price, and help you decide how much you can afford to spend on a new property.
Remortgaging
Lenders price mortgages based on a property’s loan-to-value (LTV) – i.e. the proportion of the home’s value you want to borrow as a mortgage. In general, the lower your LTV, the cheaper mortgage rates you’ll have access to.
Financial planning
Understanding your home's worth can help you assess your overall financial situation, helping you make informed decisions about investments, helping your children, or future property moves.
Inheritance tax
The value of your property impacts your potential inheritance tax liability.
Council tax
Council tax bands are calculated based on your property's value.
Borrowing money
You can often get better personal loan rates by borrowing against equity in your home.
Mortgage applications
Most homeowners remortgage every few years. How much your home is worth will impact the mortgage deals available to you.
Your loan-to-value ratio (LTV) shows how much money you’re borrowing, compared to the total value of your property. Your LTV will be expressed as a percentage.
So if you’re buying a home worth £100,000 with a deposit of £10,000 and then borrowing the other £90,000, your LTV will be 90%. In general, the lower your LTV, the better mortgage rates you’ll have access to.
Your LTV can change over time. For example, if the value of the property in the example above rises to £150,000 by the time you come to remortgage, a £90,000 mortgage will mean you have a LTV of 60%. This will usually mean you can find a cheaper mortgage rate.
Your mortgage lender will usually carry out a valuation when you apply for a mortgage. They may do this by using average sold prices in your area and other property data, or by visiting your property.
What is equity?
Equity in a house is the difference between the value of your home and how much you owe on your mortgage.
If your home is worth more than your outstanding mortgage amount, you have positive equity. If your home is worth less than you owe on your mortgage, you are in negative equity.
Should I worry about negative equity?
If you don't plan to sell and are able to afford your mortgage payments each month, negative equity may not matter too much.
But if you want to move house or remortgage, then negative equity can cause problems. In some cases, negative equity can make it difficult to sell your home as you would need to make up the shortfall to repay the mortgage lender.
Does my home’s value affect my home insurance?
Yes, your home's value will affect your home insurance premium. A higher value home typically means higher rebuilding costs in the event of a claim – this will impact your buildings insurance premium.
However, when it comes to home insurance it’s your home’s rebuild cost which is the important figure, not market value.
According to MoneySupermarket data, households paid an average of £245 for home insurance in November 2024 (Home insurance median price).
How can I check the value of my house?
Estate agent valuation
Most estate agents offer free valuations, especially if you are considering selling your home. An agent will usually visit your property to inspect its condition and features. They will then use recent sales data and local market knowledge to determine a market value.
Property portals
Rightmove and Zoopla will show prices of homes for sale in your area, as well as sold prices. They can also give you an estimate for the value of your home.
House price indices
Both Nationwide and Halifax calculate house price indices based on their mortgage data, while the Land Registry house price index uses actual sold prices.
Factors influencing your home’s value
The price of a house is influenced by several factors. These include:
Size and layout
Location
Leasehold or freehold
Risk of subsidence or flooding
Storage and outdoor space
Proximity to schools, transport links and other local amenities
Potential for extension
Aesthetic appeal
How much is my council house worth?
If you want to buy your council house via the Right To Buy scheme, you’ll need to get a valuation done by the council.
The Right To Buy scheme allows tenants to purchase their homes at a discount. There are rules in place about who can benefit from the scheme, the discounts on offer and how/when the property can later be sold on.
Comparing home insurance with MoneySuperMarket
MoneySuperMarket offers a convenient way to compare home insurance quotes and find the right policy at a competitive price.
Different insurers take differing views of letting a room to a lodger, so make sure you shop around for the right policy for your needs.
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Emma Lunn
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