Property price surveys - not for buyers and sellers?
All this week I'm working with ITV London news on a series of reports on the housing market. Monday's report was about house prices, so you read my ITV news blog:-
Kates ITV London news blog and video top tips click here.
Do house price reports really matter to you?
I look and analyse every property price survey that comes out, but in the main I find most of them aren’t that helpful if you are buying and selling. The problem is that they vary so much in the way they are produced – especially in the time they measure the market. For example:-
Rightmove
This is asking prices, so it only gives you an idea of what sellers want to sell for.
Hometrack/RICS
This is taken at the time offers are made to agents and accepted by the seller.
Halifax/Nationwide
This measures prices for mortgaged properties only. In 2012/13 35% of properties were bought with cash only!
Land Registry/Acadata
These measure sold prices, but Acadata also forecasts the numbers to boost the credibility of data.
Lets take a real example:-
Asking price: £200,000 (Rightmove)
Offer price: £190,000 (Hometrack/RICS)
Mortgage: £185,000 (Halifax/Nationwide might say there are condition issues)
Land Registry: £187,500 (Final price agreed)
In actual fact, for Feb/March the average asking price according to Rightmove is £255,962. Halifax and Nationwide are about £178,000 and the Land Registry is £168,356. So a difference of 34% between asking and sold prices in theory. To add to the complication the averages might be mean or median, they may include seasonal adjustments and lots of other different statistical ways of measuring markets! So, all in all, the ‘average’ isn’t useful, unless you are interested in long term general trends such as economists, the business community or property industry.
And if you dig a bit deeper into the regional differences, they are vast! Nationwide estimate London average house prices to be £345,000 and Northern Ireland just over £110,000 while Rightmove have staggering differences of £145,861 in the North West to £552,530 in London.
So, in reality, the indices are 'of interest' but if you are buying and selling, it’s what’s happening to your property type (flat/old/new/detached) and your postcode.
So it’s important to know your local market.
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