There’s an odd – and incorrect – assumption being made here in this complaint that the British are being overcharged for their housing. Sure, it could be true that prices are too high, in fact we’d almost certainly conclude that they are. But they’re not too high for the reason being given – we don’t buy housing by square foot. Thus errors in recording the square footage don’t lead to errors in pricing.
Another way to put this is that the market price is the market price and so if an error is always present that doesn’t change what the market price is. If we’re all paying £5 for a bag of apples whether that’s a 1lb bag or a 2lb bag doesn’t change that market price of £5 a bag of apples.
Property buyers are overpaying by an average of £13,000 because of mistakes made when measuring floor space, according to an explosive report. In London, this figure soars to almost £34,000. The average property in Britain is mismeasured by 54 sq ft, according to the research by Spec, a property tech firm, meaning buyers could be overpaying by £13,090 based on the typical price per square foot of £242. Spec said its research revealed that mismeasurement happens in 60pc of sales and that in one in eight cases the amount of floor space was oversold by more than 100 sq ft. In London, this equates to £57,697.
Nonsense. We just don’t buy property by the square foot. We don’t record prices that way, don’t consider prices that way, that’s just not how prices are determined. Thus the allegation rather fails, doesn’t it?