Property firm Rightmove reckons that the average price for a British house hit £243,737 in April, eclipsing the previous peak of £242,410 in May 2008 by 0.5%. Meanwhile, the Nationwide’s last survey said prices fell 1%, while the Land Registry reported a rise of 0.1%. It’s all rather confusing. So here’s our quick guide to the key house price surveys.
First in line is the Rightmove survey. This is based on asking prices – the price that sellers hope to achieve. However, until a sale is agreed and contracts have been exchanged, an asking price is just that. Furthermore, as with all these surveys, an average can be misleading.
London asking prices may have jumped 14.9% since the May 2008 peak, but in Yorkshire, for example, they have fallen 11.6%, while across the country as a whole (excluding London) they are down 4.3%. So although Rightmove’s data always grab the headlines, their main house price reading isn’t terribly useful.
Once a seller accepts a buyer’s offer (which may typically be 5%-10% below the asking price), the buyer arranges a mortgage and a surveyor confirms the property is worth the agreed price. This is roughly the point in the process measured by the monthly straw poll of members of the Royal Institution of Chartered Surveyors.
Estate agents and surveyors are asked whether they’re optimistic or pessimistic on prices, among other things. If 55% think prices will rise and 45% think they will fall, the reported “balance” is ten. In their February report, the balance was minus ten, indicating pessimism.
Next up are the Nationwide and Halifax surveys. These rely on approved mortgages to measure prices, so they both miss cash sales. Because they use different samples, their numbers vary – for March, for example, the Halifax reported a 2.2% rise against a 1% fall for Nationwide. Also, because mortgages are approved well after a seller markets a property, the surveys lag Rightmove.
Lastly, there’s the Land Registry. When you complete on the purchase of a property, the final, binding price is recorded and the title deeds switch from seller to buyer. As such the Land Registry number (the most recent one was for February) is the most reliable, but it also suffers the greatest time lag.
• For more, see MoneyWeek’s
UK house price indicators.