I’ve had a look at who does these house price surveys, how they are compiled and how the company benefits from publishing their reports. Call me skeptical but Nationwide seem to get a huge amount of publicity every month, the more extravagant the claim, the more publicity they get and maybe, just maybe they sell more mortgages? Rightmove publish surveys and also benefit from the publicity created to drive potential house hunters to their website over their competitors.
Land Registry produces statistics which are helpful. Land Registry records all completed property sales in England & Wales and is now publishing a monthly report on house prices, in addition to its quarterly survey. It has been recording and publishing the price of all property sales since April 2000.
Of all of the sales recorded by Land Registry since 2000 nearly 1.5 million properties have been sold more than once enabling the comparison of properties sold now with the price paid when it was sold before. I’d like to point out though that no allowance is made for properties that were sold a year ago, renovated at great expense and sold again?
The Land Registry’s quarterly survey is used to dream up the average UK house price. They add up all of the sale prices for that quarter and divide them by the number of sales although they take out repossession sales which to my mind make the figure higher then it really is. You also have to bear in mind that Land Registry only have the Sold Price information once the sale has completed and that can be months after you agreed the sale price. Twin this with the fact the reports are quarterly and Land Registry figures are out of date when they are published.
The Government, for some reason, has its own monthly house price index, issued by the Department for Communities and Local Government (DCLG). It uses lending information from fifty Mortgage lenders.
Unlike the Land Registry survey this government index does not contain information on cash purchases, which account for about a quarter of all sales making this costly Government exercise a quarter wrong and it is also two months in arrears. They also base their maths on the amount of money spent rather than quantity. Relying on expenditure in this way means that London will have a greater influence on the government’s index.
Nationwide and Halifax are Britain’s two biggest mortgage lenders and well know High Street financial institutions. They produce there reports, which often contradict each other even though their figures are often very similar, as they are both based on the purchase price agreed at survey stage. Once again though mortgage lenders only take into account their own mortgage sales and no cash transactions.
The Royal Institution of Chartered Surveyors (RICS) often have there say as to what they feel is going on. This simply involves asking some of their members how they feel the market is moving. Very scientific!
Hometrack, Team & movewithus produce their own house price surveys. All three of these organisations attempt to collect information from Estate Agents who are usually paying them monthly membership fees. They simply call the Estate Agents and quiz them on the quantity of previous months enquiries, viewings, sales and exchanges. When though have you ever heard an Estate Agent say they are quiet?
Rightmove only look at asking prices for houses placed on its own website over the previous month. Rightmove only has 35% of all homes for sale and if I chose to market any house, worth £200,000 at £2 million we all know I’d never sell it but Rightmove would include it in their survey!
What is interesting is that none of the organisations producing these surveys sell houses! If you want to know the value of your property call your local independent Estate Agent, if you want to know where prices will be in a years time frankly your guess will be as good as everyone else’s!
Gatehouse Estates have been favoured with instructions to sell this five bedroom individual family home within walking distance of Kimbolton School.
