How do you work out what a house is worth?

Compare it with homes of the same type and size in the same area, on two separate bases and never mixed together. First, what similar homes are currently asking, which tells you what you are competing with. Second, what similar homes actually sold for, from HM Land Registry, which tells you what buyers paid. Price per square foot makes the comparison like for like when the homes differ in size. Then check which way sold prices have moved and how often asking prices in that area get cut, because those tell you whether today's asking prices are being accepted.

Is the gap between the asking price and recent sold prices the discount I should ask for?

No, and treating it as one is the most common mistake. Sold prices are completions that were agreed months earlier and registered later, so they describe a slightly older market, and the homes that happened to sell are not the same homes that are on sale now. The gap is context for a conversation, not a target. Look at the direction sold prices have moved since, and at what sellers in that area actually concede, before deciding what the gap means.

What is a normal price reduction on a house?

It varies by area, and the useful figure is the local one rather than a national average. In Didsbury in the 30 days to 31 August 2026, 22 of the 128 homes on the market had their asking price cut, and the typical cut was 4%, or £10,000. An area where a sixth of the stock is being reduced every month is one where an ambitious asking price is routinely corrected.

Why use price per square foot instead of just the price?

Because the price alone cannot tell you whether a home is expensive or simply large. Price per square foot puts a 900 sq ft and a 1,400 sq ft home on the same scale, which is what makes two different homes comparable. It is not the whole answer, since condition, garden, floor and outlook are not in the number, but it is the fastest way to see whether an asking price is unusual for what you are getting.

Where do I find a home's floor area?

The listing sometimes states it, and the floorplan usually gives a total. Failing both, the EPC register holds a total floor area for most homes in England and Wales, searchable by address. Be aware the EPC figure and the agent's figure are measured differently and can differ by a few per cent, which matters when you are comparing per square foot.

Guides

How to work out what a house is worth: one home, step by step

Updated 1 September 2026 9 min readBy the Perch team

Working out what a house is worth is not one calculation. It is four questions asked in order, each of which can overturn the answer to the last. Below is a real one, worked all the way through: a three-bedroom semi in Didsbury, south Manchester, asking £625,000. The numbers are the ones Perch published for Didsbury on 31 August 2026, and you can check every one of them on the Didsbury market page. The interesting part is not the arithmetic. It is the two places where the obvious conclusion is wrong.

The home

A three-bedroom semi-detached house in Didsbury, about 1,150 sq ft, on at £625,000. That is a deliberately ordinary choice: £625,000 is the median asking price for a semi in Didsbury, so this home sits exactly in the middle of its own type. Nothing about the headline price looks unusual, which is the point. The question is what happens when you stop looking at the headline.

Step 1: compare it with its own type, not with the area

The first number most people meet is the area median. In Didsbury that is £400,000, across 128 homes for sale. Against that, £625,000 looks steep, and it would be easy to stop there.

It would also be meaningless. Forty-eight per cent of what is for sale in Didsbury is flats, and they set that median. Split by type, the picture is completely different:

Type	For sale	Median asking
Flat	61	£240,000
Semi-detached	33	£625,000
Terraced	12	£485,000
Detached	10	£895,000

Our home is not 56% above the market. It is at the median for a semi, and the £400,000 area figure was never a comparison, it was a mixture. The first thing an area median tells you is what the area is made of, not what a home in it is worth.

Step 2: find out what buyers actually paid

HM Land Registry records every completed sale in England and Wales. In Didsbury there were 272 registered sales in the twelve months to December 2025, at a median of £400,000. That figure has the same mixture problem as before, so again it needs splitting, and the cleanest split is per square foot, because it puts homes of different sizes on one scale.

Matching those sales to EPC floor areas gives, for the twelve months to June 2026:

Type	Sales	Median sold £/sq ft
Flat	85	£369
Terraced	43	£461
Semi-detached	73	£465
All types	220	£433

Now put our home on the same scale. £625,000 across about 1,150 sq ft is roughly £543 per square foot. Semis in Didsbury sold at a median of £465. Across all types, the middle half of sales landed between £356 and £491, so £543 is above the top of that range.

That is a real finding, and it is the one the headline price hid: the home is asking about 17% more per square foot than semis in Didsbury have been selling for.

Step 3: do not treat that 17% as a discount

This is where the worked example gets genuinely useful, because the tempting next move is to offer 17% under and call it evidence based. That would be misreading the number in three ways at once.

The two figures describe different moments. A sold price is a completion. It was agreed months before it completed and registered weeks after, so a twelve-month window ending in June 2026 is describing offers accepted across roughly 2025 and early 2026. The £625,000 is today.
They describe different homes. The 73 semis that sold are not the 33 that are for sale. If the ones that sold were smaller, more tired, or further from the village, the gap is partly just a difference in what is being measured.
The floor area may not be the same measurement. The sold figures use EPC floor areas; the 1,150 sq ft came off a floorplan. Those two methods routinely differ by a few per cent, and a few per cent on the denominator moves £543 more than it looks.

So the 17% is not a target. It is a question: is this home better than the ones that sold, or is it priced as though it is? That question is answered by viewing it, and by the next two steps.

Step 4: check which way the market has moved since

A gap against past sales matters much less in a rising market than a flat one, because the past sales are stale in a specific, measurable direction. So look at the same measure over time, for the same type. Median sold £/sq ft for semis in Didsbury, at successive twelve-month windows:

12 months to	Semi-detached £/sq ft
June 2021	£381
June 2023	£426
June 2024	£456
June 2025	£433
June 2026	£465

Two readings, and both are worth having. Over five years, semis are up about 22%. Over the last year, they are up about 7%, having dipped in between. A market rising 7% a year explains a meaningful part of the gap between £465 and £543, because the sold figure is describing a market several months behind the asking one.

It does not explain all of it. Roughly half the gap survives the trend, which is the number actually worth negotiating about.

Step 5: check whether the market is accepting today’s prices

The last question is the one buyers most often skip, and it is the cheapest to answer. If asking prices in an area are routinely cut, then asking prices in that area are routinely optimistic, and you have a good idea of by how much.

In Didsbury, in the 30 days to 31 August 2026:

22 of 128 listings had their asking price reduced, up from 16 in the previous 30 days. That is about one in six of everything on the market, in a month.
The typical reduction was 4%, or £10,000. That is what sellers here actually concede, as opposed to what buyers hope for.
44 homes came off the market and 34 new ones arrived. Stock is shrinking slightly, which is not the pattern of a market where sellers are desperate.

Read together those say something quite specific: prices here do get corrected, but in single-digit steps, and homes are still leaving the market faster than they arrive. That is not a market that will hand you 17%.

Putting it together

Nothing in the five steps produces a valuation, and any tool that claims to produce one from this data is overstating what the data can do. What they produce is a position you can defend:

The asking price is normal for its type, and the area median was never the right comparison.
Per square foot it is at the expensive end, above the top quarter of what sold.
A rising market explains part of that, so the real gap is roughly half of what it first looked like.
Reductions here run at about 4%, so a first offer somewhere in that territory is a number the seller has seen before and will engage with, and one you can explain in a sentence.
The single biggest remaining unknown is whether the home is actually better than the semis that sold. That is what the viewing is for, and now you know exactly what to look for.

The thing worth taking from this is the order. Type before area, sold before asking, direction before gap, and local behaviour before any rule of thumb. Skip a step and the number you land on will be confident and wrong.

Do it on your own home

Every figure in this article is published, dated and free to check. The price check runs steps one to three on any home for sale in England or Wales, and the area market pages carry steps four and five for the area around it. If you would rather Perch watched a whole area for you and told you when something worth looking at appeared, set up a search.