Thursday, November 08, 2007
Two in a row from Halifax
Posted by David Smith at 09:00 AM
Category: Thoughts and responses

The Halifax reported a 0.5% drop in house prices last month, following a 0.6% drop in September. It was thus in sharp contrast to the Nationwide, which said prices rose by 1.1% in October alone. The truth probably lies somewhere in between, with prices probably flat. In the latest three months, the Halifax measure showed a 0.3% rise on the previous three months. Details are here.

Why the differences in the data? The coverage of the two series is different but the Halifax appears to be more volatile. I'd forgotten that its index showed a 0.9% fall as recently as last December. It last had two falls in a row in 2005. Where the two come together is in suggesting that prices are 9-10% up on a year ago.


I wish they would just hand all their figures to an independant body, so many indicies predicting different trends, it makes the reports look a complete waste of time - the only one that has a credible stand point is the Land Registry in my opinion, the others just aren't worth looking at.

That said, I might take the figures from Haliwide and produce my own report, it'll be as insightful as the all rest I think!

Posted by: Dan at November 8, 2007 12:45 PM

There are significant problems with the new land registry monthly index as well i'm afraid. It uses a technique which examines repeat sales i.e. where a particular house appears in the data set more than once. This would normally be ok but because the LR dataset only goes back to 2000 it means that there is a significant bias plaaced on houses that have been sold twice in a short space of team, which are often houses which have been "done up" and had money spent on them, therefore the price rises do not actually reflect what is happening in the market.

The quarterly old LR survey was a simple straight-through average of all transactions in the quarter, and that was a pretty good methodology, but I'm not sure if they still produce it anymore.

All the indices have problems to be honest.

Posted by: Minh at November 8, 2007 05:33 PM
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