Comments: What's the true rate of house price inflation?

In a previous BoE Inflation Report the Bank published a page describing all the common measures of house prices and at which point in the house buying process they measure (the trade off with the more comprehensive measures such as the Land Registry stats is that the data take longer to compile).

An interesting investigation could be to look at house price gains across different price strata categories i.e. has the high value/high income segment experience similar percentage gains in house prices compared to the national averages? If so, perhaps the greater nominal gain in their wealth should be considered as a strong balance sheet effect, that helps put the rise in average national debt levels in context. I don't know if national micro level statistics exist to investigate this, but studies in the US and find that much of the low saving rate could be attributed to large balance sheet gains (shares and property) among the wealthier segment of the population.

Posted by Caravaggio at January 3, 2007 01:49 PM

Now Halifax says prices fell by 1% in December.

Posted by David Smith at January 5, 2007 09:57 AM

David, you won't see many papers reporting the 1% drop, all focus will be on the rise. Still annoys me that rising house prices are seen as a good thing. It isn't seen that way when food & energy prices rise.

Posted by Kev M at January 8, 2007 12:43 PM

That's wrong - every paper I looked at reported the 1% Halifax drop.

Posted by David Smith at January 8, 2007 01:26 PM

David, I'm curious what your take on the article by Ashley Seager in the January 8th edition of the Guardian ('A land Tax is 200 years overdue). http://business.guardian.co.uk/story/0,,1984814,00.html

Posted by Walt at January 8, 2007 05:24 PM

The land tax debate has been running for a very long time. It is not clear whether people want a straight land tax, or capital gains tax on housing. Somebody else has raised this on our discussion forum (click on the menu on the left) and I've given a short response. If you want to take part in the forum - and that goes for anybody else - please register.

Posted by David Smith at January 8, 2007 05:31 PM