The poll of 250 estate agents found that sellers could be missing out on tens of thousands of pounds as a result of AVM undervalues.

87% of respondents felt that AI-powered valuation tools failed to reflect a home’s true value, including in Northern, lower-income, and rural areas.

However, the survey went on to note that 78% of respondents relied heavily on AI or AVMs when putting a price on a home, while as many as 23% claimed to ‘always’ use them.

Despite this, 73% admitted they still don’t fully trust the tools they’re using to make these calculations.

When asked how much they typically adjust AVM-generated valuations, nearly a third of respondents (28%), reported changing the figure by £10,001 to £20,000, and 10% said they regularly amend valuations by more than £20,000.

Agents also raised concerns about regional fairness, with 20% believing the tools tend to undervalue rural properties, while 11% thought they “strongly undervalue” Northern or lower-income areas.

Almost eight in 10 agents (77%) thought the technology, at least sometimes, failed to account for key factors that influence a property’s true value, with an especially lacking area being algorithms’ abilities to detect a house’s added value in areas such as recent renovations, unique features, or the condition of the property.

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According to the report, the least accurate valuations were also found to occur in properties in rapidly changing markets (27%), rural locations (23%), and transitional neighbourhoods (21%).

On a regional basis, estate agents were most likely to report AI under-valuationsin the North-East (22%), East of England (22%), and Yorkshire and the Humber (21%).

A spokesperson from Alto, 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.

Commenting on the regional and property specification under-valuations, 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.”