House price surveys confuse the market again

House price surveys confuse the market again

9:30 AM, 5th May 2011, About 13 years ago

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Road sign of collapsing houseThe topsy-turvy world of UK house price surveys seems to have produced another set of nonsense results as the monthly merry go round of conflicting reports continues to confuse home owners and buyers.

In 24 hours, three surveys that track house price rise and falls have reported three entirely different sets of results on the very same subject.

First was online property portal Hometrack, they reported house prices in England and Wales remained unchanged last month – the first time since June prices have not fallen month on month. They also claimed the average home price is £153,100, 3.3% lower than in April 2010.

The Hometrack survey is a ‘sentiment’ index based on how estate agents respond to a set series of questions rather than sales data.

Next in line was the Nationwide Building Society index, whose index is based on mortgage approvals to customers. According to them, prices fell 0.2% in April and were down 1.3% compared with April last year and the average house price is £165,609.

Finally, the Land Registry released data for March that disclosed a fall of 2.3% in house prices and that the average home in England and Wales is valued at £160,996.

The Land Registry also showed London was the only place with an annual price increase – up 0.8%, while the north-west was the only region with a monthly upwards price change – 0.7%.

Clearly, no survey price return seems to have any relationship with any other result.

For example, without drilling down into regional or postcode data, it’s impossible to work out the price of a home where you live or want to buy, although all three survey websites have this facility.

The only common thread is that each survey expects house prices to continue falling soon.

Robert Gardner, Nationwide’s chief economist, made a typically non-committal and uninformative observation about the building society’s survey: “The price of a typical house fell by 0.2% in April, which left prices 1.3% lower than the same period of 2010. The three month on three month measure of house prices, a better measure of the underlying trend, showed a modest rise of 0.6%.

“Since November 2010 house prices have increased in three months and fallen in three months. However, it is not unusual to see a pattern of modest monthly increases and decreases when the market is fairly static, as has been the case since last summer.”

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