Nine out of 10 estate agents believe that AI software, known as automated valuation models (AVMs), are consistently undervaluing properties. A survey of 250 estate agents revealed that the majority feel AI-powered valuation tools do not accurately reflect the true value of a home, particularly in Northern, lower-income, and rural areas. This means UK homeowners could potentially be at a disadvantage when selling their property.
Eight out of ten agents heavily rely on AI or AVMs when pricing a home, with a quarter claiming they ‘always’ use them, mainly to save time. This is even though three quarters say they don’t fully trust the tools they’re using to make these calculations and sometimes have to adjust the final calculations.
A spokesperson from estate agency platform Alto, which commissioned the research, said: “AI is encroaching more and more on so many areas of our lives, but housing valuations isn’t one that usually springs to the front of people’s minds.
“Agents are telling us AI is undervaluing sellers’ homes and we should be listening. These tools can save time and provide a starting point, but they’re no substitute for local knowledge and real-world experience.”
“The risk is that homes are priced based on flawed data, and sellers lose out. We trust agents and we believe they should be empowered, not replaced,” they added.
Estate agents have voiced concerns over a lack of personal touch, limited data sources, and algorithmic bias. Eight out of 10 agents also believe the technology fails to consider crucial factors that influence a property’s true value.
They highlighted the algorithms’ inability to recognise added value from recent renovations, unique features, or the overall condition of the property. Other significant aspects frequently overlooked during an evaluation include noise levels, crime rates, and economic conditions.
For some homeowners who have made significant investments over the years these oversights can be costly. Extensions, loft conversions, and smart home technology are often ignored.
The study also found that the least accurate valuations typically occur in rapidly changing markets, rural locations, and transitional neighbourhoods.
Agents in the North East reported having to adjust AI-generated listing prices by £20,000 or more on average, highlighting the risk that sellers may unknowingly lose out when marketing their home.
Alto’s spokesperson added: “This just goes to show there are inconsistencies with this technology – across the country and when it comes to specific features.
“We need to ensure that we’re not losing our human touch and that people can trust in their estate agents during a time that can already be incredibly stressful.
“AI has its place, but it should be used to support professionals, not override them. Selling your home can be an emotional time and will only be more so if people feel they’re not getting what they truly deserve.”