Guide
Below market value: what it means, and how it is measured
Everybody sells "below market value". Almost nobody says what the value is or what "below" is measured against. Here it is a return on the price, against a value worked out from recorded sales, and this guide shows the arithmetic so you can check it.
Published 5 September 2026 · Updated 5 September 2026
Pay P for something worth V and you have made V − P on the P you put in. The return is (V − P) ÷ P. That is the number this site grades on, and it is not the same as the discount off the value, (V − P) ÷ V, which is what "20% BMV" usually means in an advert.
The two do not rank the same way. Buying a fifth under the value returns a quarter on the price. Twenty per cent off a £160,000 value is £128,000; a 20% return on the price is £133,333. The site shows both figures on a card — how far under the value the asking price is, and what it returns — but the verdict is the return, because the return is what you make.
The default target is a 20% return. So the price that reaches the target is the value divided by 1.2, and a card says that price and how far the asking price is from it.
Recorded sale prices from HM Land Registry, of properties near the listing, of the same type and with the same number of bedrooms or within one, sold in the last three years. Half a mile out first; a mile, then two, if half a mile has too few. Fewer than five such sales and no value is given at all — a valuation from three sales is just three sales, and everything downstream would inherit it.
Where floor areas are known, the sales are worked in price per square foot and scaled to the listing, so a house half the size of its neighbours is not valued as if it were their size. Where they are not, the sale prices are used directly, and the card says its confidence is lower.
The value is the upper quartile of that evidence, not the middle. It is what a property in good order sells for, and a below-market-value property is one that needs no work to be in that order. How the end value is worked out has the rest.
A property that needs no work is graded on the return its asking price makes against the value. Three outcomes, and the card wears one of them.
Buy at asking
The return at the asking price is at or above the target. No negotiation required: pay the advertised price and the 20% holds.
Worth an offer
Short of the target by no more than ten percentage points, so a return of at least 10% at asking. The card names the price that reaches 20% and how much there is to find.
Out of range
More than ten points short. Shown, with its figures, but not as an opportunity: the offer that reaches the target is further off the asking price than a negotiation plausibly recovers.
And if it needs work
Then it is not this route at all. A property that needs refurbishment is graded on the asking price against the most you could pay once the work is costed — the other half of the grading.
The same property at three asking prices. The value is £160,000; the price that returns 20% is £160,000 ÷ 1.2 = £133,333.
| Asking | Return at asking | Verdict | Why |
|---|---|---|---|
| £120,000 | 33.3% | Buy at asking | Already past the 20% target at the asking price. |
| £140,000 | 14.3% | Worth an offer | Within ten points of the target. Offer £133,333. |
| £150,000 | 6.7% | Out of range | More than ten points short; an offer at £133,333 is 11% off the asking. |
A valuation. It is a reading of recorded sales by a rule, and the rule is written here so you can disagree with it. The sales it used are on every property page. Check them, and check the property, before an offer.