Confused about the contradicting reports in the media about fluctuations in the housing market? This is how they are calculated. Every month each of the following organisations publishes house market reports, these include stats from:
LSL Property Services/Acadametrics
Office for National Statistics
Royal Institution of Chartered Surveyors
The media then use these stats to produce their articles, but they can be very misleading. The Halifax for example base their information on the average price agreed on a property, using only data by mortgages approved by Halifax and use the change in the price over that particular month and the year of purchase.
Alternatively, the land registry (this is the governmental office responsible for registering all houses and land bought in England and Wales) base their monthly data by taking the average house prices bought in the last month, including any cash transactions. The only problem with these stats is the fact that the Land Registry do not take into consideration new homes that are sold as well as older properties which have stayed in families for generations, which means that fewer than 35% are actually used. Although these figures are robust, they will differ slightly each month because of the time lag of properties being registered.
Rightmove is one of the largest on-line search engines for property in the UK, they advertise 90% of properties being sold in the UK by estate agents. Their stats show the average price of property put on the market during the past month. Rightmove average out the property prices not taking into consideration for example the difference between flats and houses, so if one month more flats sell than houses it will cause the results to be a bit ambiguous. It also reflects the house prices as they come onto the market, not taking into consideration the final properties achieved selling price.
After taking a look around at all of the indices provided by these major organisations, we can conclude that the information provided can only be used as a rough guide to the overall property market trend. However if you want to get an accurate gauge on what your local property market is doing, rather than the average for England and Wales, then you will need to pop into your local experienced agent, such as Intercounty, who will be happy to discuss exactly what the market is doing in your local area.