We are hearing conflicting reports on what’s happening to the market from property price surveys at the moment. In January 2009, Halifax declared that house prices had risen by 2%; they reported a decline of -2.3% in February and -1.9% in March. Nationwide on the other hand claimed a -1.2% decline in property prices in January 2009, a -1.9% fall in February and suddenly a +0.9% increase in March. So, what's going on?
By Kate Faulkner
With such conflicting reports, it's no wonder we're confused? What is happening to house prices? Are they going up or going down and which one of the surveys is right? The real answer to this question is that none of the property survey reports is particularly helpful when you are thinking about buying or selling a home yourself, as they are based on a ‘statistical average’ which is collected from their data, often at different times of a property sale cycle.
For example, Rightmove collect data based on asking prices, so their average property price is higher than other reports and if property prices are rising, they are likely to show this first. Nationwide and Halifax base their data on mortgage completions which are often six to eight weeks behind what’s actually happening in the market. One of the major problems with their data at the moment is that they are only selling half the number of mortgages than last year, meaning their reports are only half as reliable as they were from the previous year. And, as with any data, the smaller the sample number of properties that are included, the more likely ‘anomalies’ in data such as a small increase followed by a decline are likely. Even the Nationwide stated in March, that their current report of a 2% ‘surprise rise’ is 'somewhat distorted by conditions last year'.
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