UK homeowners have lost touch with what their homes are worth, collectively undervaluing their property by £237bn, according to Zoopla.

The property website found that 45% of home owners undervalued their home by an average of £46,300, while 25% overvalued their property by an average of £44,313.

The remaining 30% of respondents gave a more or less accurate estimate for their home’s value.

When all survey responses are considered together, the net result is that home owners undervalue their properties by an average of £9,470.

For 9% of homeowners, particularly those in London and the South East, the disparity between their estimate and their home’s true value was even greater at £100,000 or more.

The survey of 2,000 home owners was carried out as part of a marketing drive by Zoopla to encourage people to use the valuation tool on its website in a bid to boost sales.

Over a fifth of those whose home was worth more than they realised said they simply couldn’t believe what their home was worth, whilst six per cent said they felt as if they had ‘won the lottery’ when they realised the scale of the equity hidden within their home. A further 31% said they were ‘overjoyed’.

However, cashing in on this hidden equity will not be easy for home owners who are too young to take out a lifetime mortgage and unless they are willing to downsize or move to a cheaper location.

Zoopla chief commercial officer Andy Marshall says “The pandemic and subsequent lockdowns have led to a once-in-a-lifetime reassessment from homeowners about how and where they want to live. 

“This, coupled with the stamp duty holiday and the search for space, has led to a buoyant market; however, it’s clear this soaring buyer demand is not currently being matched by the supply of homes being listed for sale.”