UK premium domain market: £2.8 billion annually. Average premium .co.uk sells for £4,200. Top tier: £50,000-£500,000. Single-word domains exceed £1 million.
What Makes Domain Premium
Short (1-2 words), memorable, keyword-rich, exact match for search term, .co.uk or .com extension, brandable, no hyphens/numbers.
Valuation Factors
Length: Shorter = higher. Extension: .co.uk/.com worth more. Age: Older domains (established 10+ years) command 30% premium. Traffic: Existing visitors add value.
Length Pricing
1-word .co.uk: £25,000-£500,000+. 2-word .co.uk: £1,500-£50,000. 3-word .co.uk: £500-£5,000. 4+ words: Premium value unlikely unless exact brand match.
Keyword Search Volume
Domain matching 10,000+ monthly UK searches worth more than obscure term. "loans.co.uk" more valuable than "gelato.co.uk" despite both being dictionary words.
Overvaluation trap: Sellers often price domains 5-10x realistic market value. Only 8% of premium domains listed above £10,000 sell within 12 months.
Comparable Sales Research
Check NameBio.com, Sedo sales history, DN Journal. Find recent sales of similar domains (length, extension, industry). Market changes fast - use sales from last 12 months only.
Professional Appraisal
Automated tools (Estibot, GoDaddy) provide rough estimate (often inaccurate). Human appraisal from domain broker: £100-300. Worth it for domains you believe exceed £5,000.
Revenue Potential Method
If domain currently earns revenue (parking ads, affiliate links, mini-site), value = annual revenue x 10-15. £2,000/year revenue = £20,000-£30,000 valuation.
Development Potential
Undeveloped premium domain worth less than developed. But development costs (£5,000-£50,000 for quality site) don't add to domain value. Domain value separate from website value.
Negotiation Strategy
Listed price is starting point, not final. Offer 30-50% of asking price. Seller counters. Meet in middle. Cash payment (no installments) justifies 10-15% discount.
Broker Services
Sedo, Afternic, Atom.com broker sales for 10-20% commission. Handle negotiation, escrow, transfer. Worth fee for domains above £3,000 (reduces fraud risk).
Never pay seller directly for premium domain. Use escrow service (Escrow.com, Sedo). Seller paid only after domain transferred. Prevents £thousands in fraud losses.
Buying vs Building
Premium domain £5,000. Alternative: Register creative name for £10. Premium domain provides instant authority and SEO head start. Worth cost for established business, not startup.
Tax Treatment
Domain is business asset. Purchase price capitalised, not expensed. Annual renewal fees are deductible expense. Sale of domain may trigger capital gains tax (CGT).
Trademark Lens checks if premium domain you're considering conflicts with registered trademarks - essential due diligence before five-figure purchase.