20:10 PM, 18th January 2011, About 12 years ago 1
The monthly house price charade seems ridiculous when lenders and the government are still crunching the numbers for November when online stores and personal banking web sites can deliver real time stock and account details in seconds.
In a fast moving world where someone in Australia can transfer money in to a UK bank account in seconds regardless of time zones and distance, why do homeowners want to know how much there home might have been worth almost three months ago?
The Communities and Local Government Department is the latest culprit – releasing average house price figures and commentary on price movements in the quarter ending November 30, 2010.
It’s comforting to know the average house price then was £208,585 and 4% on the previous November, but the figures have no relevance whatsoever to today.
To rub salt in to the wound, the Royal Institution of Chartered Surveyors issued the results of their housing market survey for January that deals with estate agents opinions of the market up to December 31.
Average home prices are worthless indicators
Other indices – like those issued by the Halifax and Nationwide – have already revealed house price movements according to their statistics for December.
Before Christmas, the government announced a review of house price surveys to come up with a single index that gives a clear indicator to homeowners and property professionals about the specific value of an individual home.
Clearly the different surveys that return average house prices for a region based on varying sample data are not satisfactory.
After all, no one lives in an average home. Prices depend on more subjective factors, like location, schools, the standard of the neighbourhood and transport links.
According to current indices, the same average home is worth between £162,435 (Halifax) and £222,400 (Rightmove). The Halifax price is based on mortgage approvals to customers, while the Rightmove figure comes from estate agent asking prices.
Surveyors base home values on prices achieved by similar homes sold in the same area within the past few months. This would seem to offer a more reliable comparison than mortgage applications or asking prices that were probably not achieved.