TheMoveChannel.com´s Property Inspector: taking a closer look at global real estate each month.

House prices reveal a lot about a property market, from demand and confidence to investment potential. The problem is that there are so many house price reports around. In the UK alone, there are at least 10 indices that track prices, others that track perception of prices, let alone ones that track rents. With their figures not always agreeing, what are the differences between them all? Which is the most reliable?

• Important to be aware of differences between indices
• Average price for 2 bed home in England now £157,788, according to TheMoveChannel.com
• London most expensive market in UK, with average 2 bed house price of £495,543
• Live property price information available on TheMoveChannel.com’s new Map Search

TheMoveChannel.com´s Property Inspector talks to Ian Spencer, Marketing Manager of lead generation firm Lead Galaxy, to decipher the mystery of the multiple price indices.

Click here to read the full interview. An abridged transcript follows:

“There are at least 10, which range from mortgage lenders, such as Halifax, to more official measures from the Office for National Statistics and the Land Registry. Recently, a growing number of estate agents have started to produce them too.”

“That depends on each index, because they are all based on data available to the company that creates them. Each one tracks figures from different stages in the sales process.”

“Halifax and Nationwide are both lenders, so their indices show the average price agreed on a property purchased using a Halifax or Nationwide mortgage, as well as how that has changed in the last month and year. Both cover the whole of the UK and both are seasonally adjusted.”

“Exactly that. Figures are adjusted to account for seasonal trends and wider patterns and factors. A house price decrease in winter, for example, when the market slows down, might be less severe when adjusted for context or anticipation. The raw data, though, might show a rise, or even a more severe drop.”

“Technically, it´s the Land Registry or the Office for National Statistics. The Land Registry is based on completed sales prices, which means that they are accurate – although they are also slightly behind and often revise their figures later.

“The ONS figures are based on data from sales provided by lenders. It´s only a sample of sales, but figures are, in their words, “one of the main house price indices used by central and local government to support decision making in the UK”.

“It´s hard to rank them, but the ones that are the least reliable are technically the ones that relate to the perception of house prices – because they´re not measuring values. The Royal Institution of Chartered Surveyors, for example, publishes a survey of surveyor perceptions of house values, while Knight Frank´s House Price Sentiment Index shows how confident households are about their homes and the wider market. Zoopla also recently published data that shows homeowners expect prices to rise by 8.8 per cent in the next six months. That shows market confidence is improved, which is useful for gauging sentiment and future growth, but it does not tell you anything concrete.”

“The more data, the more accurate the index. Rightmove claims to list properties sold by over 90 per cent of agents, which is relatively comprehensive.”

Not quite, because it is based on asking prices for homes rather than completed sales prices: a house price can change dramatically before the sale is finalised.

“If you´ve got enough data there´s probably no reason why you wouldn´t. From a marketing perspective, these reports will be picked up by major press or, if you´re a local estate agent, the local press, so you can certainly see why estate agents would do it. But obviously, the more reports that there are out there, the more it can end up confusing the market.”

“Yes. TheMoveChannel.com offers live property price information for markets around the world – not just the UK – through its new map search function. According to our data of properties currently for sale, the average price of a 2 bed home in England is £157,788. In London, that is much higher, with an average price of £495,543.

“These figures differ with, for example, Nationwide´s figures, which show the average house in England is worth £180,264, while the average London house is worth £362,699, but they confirm the imbalance between the capital and the rest of the country.

“In a way, all of them. They are all useful for measuring different things. At the moment, they all have one thing in common: positive indicators for the UK housing market. The important thing is to understand the difference between them all, so that when you have two conflicting reports, you know why they disagree.”

Founded in 1999, TheMoveChannel.com is the leading independent website for international property, with more than 800,000 listings in over 100 countries around the world, marketed on behalf of agents, developers and private owners.

The website address ishttp://www.TheMoveChannel.com and the office address is 24 Jack’s Place, Corbet Place, Spitalfields, London, E1 6NN.

Contact Dan Johnson on 0207 952 7650 for further information.