15:10 PM, 21st June 2011, About 13 years ago
The real worth of official housing market statistics has received another knock with the revelation that Bank of England researchers are relying on Google for their data.
In December, Pensions minister Iain Duncan Smith revealed the government kept no data on residential lettings and answered questions in Parliament based on figures cobbled together from an index prepared by property portal www.findaproperty.com.
Now, the Bank of England is apparently researching keyword data from search engine Google to compare with house price index findings to look at movements in prices and the number of homes sold.
After testing keywords, the best term for predicting house prices was ‘estate agent’, which the researchers claim gave better results than other surveys, including the much-vaunted Royal Institution of Chartered Surveyor’s reports.
The assumption is the researchers are investigating house price surveys for two reasons –
Basing official statistics on Google data has pros and cons.
The underlying accuracy of the data is not known and could be subject to manipulation by a third party for commercial or financial reasons.
However, the results are likely to carry more weight than any other survey because the sample size – the number of people searching Google – is larger than those other surveys cite as a base for their statistics.
The keywords ‘estate agent’ are thought to give an insight in to the thought process underlying the property market, because only those actively seeking to buy or sell a home are likely to want to contact an estate agent.
No results are known on the keywords ‘letting agent’, but these would probably show similar results for the private residential letting market.