At current prices, it takes 232 ounces of gold to buy the average UK house – up 60% in the last three years. Here, Dominic Frisby compares the two markets.
UK house price indicators
We watch five indicators, all of which have proved useful guides in the past. These include the RICS Housing Market Survey and data on both mortgage lending and mortgage approvals. Consumer confidence is another useful data point we keep an eye on.
You can read in detail what each indicator suggests for UK house prices using the tabs above.
What's the latest?February's RICS balance fell to 7, ie, 7% more surveyors saw prices rising than falling. The January Halifax UK three-monthly house price index saw a 8.5% year-on-year rise.
What does this mean for UK house prices? The RICS survey leads the Halifax index by around six months. With a balance of 7%, will Britain's housing market keep climbing?
What's the latest?November saw UK NMLG fall to 4.4%. That compares with annual growth of 1.9% two years ago, 5.7% in December 2008 and 11.1% in February 2007. Meanwhile, the December Nationwide UK house price index is 7.2% higher year-on-year.
What does this mean for house prices? This long-term collapse in NMLG suggests UK house prices are standing at the cliff face. If they follow net lending trends, residential property values could slump by over 15%.
This gauges the monthly mood swings of Britain's consumers. It "tracks changes in personal finance, the general economic situation, inflation, unemployment, the current purchasing climate, and consumer spending and saving", say its compilers GfK/NOP.
What's the latest? For December, the GfK rose to 1. January's Halifax UK three-monthly house price index saw a 8.5% year-on-year rise.
What does this mean for UK house prices? This indicator leads the Halifax UK three-monthly house price index by some four months. The recent rise in the GfK indicates rising consumer confidence.
The UK CPI (consumer price index) is the most widely-used indicator of our cost of living.
What's the latest? January's UK CPI was up 0.3% year-on-year, compared to 0.5% the previous month. Meanwhile, RPI was 1.1% higher – down from 1.6% in December. The January Nationwide UK house price index is 6.8% higher year-on-year.
What does this mean for UK house prices? Higher CPI normally means higher interest rates. Despite the fall in UK CPI since 2010, inflation is still too high. It may drop more, but the historic relationship of higher CPI = less UK house price inflation will return at some point.
Property: the MoneyWeek view
March 2015: Dirt-cheap home loans Average rates on new UK mortgages have fallen below 3%. Approvals have risen for a second straight month, suggesting the annual rate of house-price growth will rise from 5% today. US prices look mildly overvalued. Japan and Germany still look appealing, but steer clear of bigger German cities.
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