Q. The RICS was recently reported as saying that house prices are expected to fall, but other sources suggest they are holding steady or even rising in some areas. With so many differing views being aired, who do I believe?
ASK THE EXPERT
A. An interesting question, and one even the Government is concerned about! In fact, it has just asked the Office for National Statistics to investigate the “coherence and comparability” of the two official sources of house price data – the Land Registry and the Department for Communities and Local Government – prior to conducting a broader review of these statistics to see how useful they are to the public.
Basically, the problem lies in the fact that the various bodies that issue house price data all use different methods to calculate their figures. So, for one reason or another they all need to be taken with a pinch of salt. Take your example of the RICS (the Royal Institution of Chartered Surveyors). You may be surprised to learn that their reports are based on the opinions of little more than a handful of members, who are asked what they think might happen to house prices in their area over the next few months. Hardly a scientific survey – and certainly not the basis for the lead story on the BBC and Sky News!
As for Rightmove, and the other national property websites…they of course deal in asking prices – and since these are almost always over-optimistic, they generally end up coming down!
Then there are the building societies and other lenders. Their figures obviously don’t take into account the growing number of properties that are sold without the buyers requiring a mortgage at all – for example, when older people down-size. But in any case, much depends on the particular lender. So, for example, the Nationwide regularly comes up with figures that are markedly different from those published by the Halifax – for the simple reason that the former does a higher proportion of its business in London and the South East.
Finally, the Land Registry figures are widely regarded as the most reliable – but they are at least 3 months out of date!
Ultimately, of course, all these figures are national or at best regional averages – and they may have little or no bearing on what is actually happening in your street. That’s why, when all’s said and done, your best bet is to ask your local estate agent.