We speak to local property experts to clear up index confusion
Property watchers would be forgiven for being confused following the publication of conflicting recent house price indexes.
Home sellers raised asking prices for a third month in a row as a shortage of properties for sale helped support values according to Rightmove Plc.
Nationwide agreed with this stating house prices increased by 0.3% in February. Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said: “House prices increased by 0.3% month-on-month in February, leaving prices 0.1% lower than the same month a year ago. The overall picture is still one of a market treading water. Indeed, the three month on three month measure of house prices, a better measure of the underlying trend, was basically flat in February at -0.1%.
“This shouldn’t come as too much of a surprise. Housing market trends are closely linked to wider economic prospects. Given that the recovery hit a soft patch at the turn of the year and looks set to remain sluggish in the year ahead, the property market is likely to follow suit, with relatively low transaction levels and prices moving sideways or modestly lower through 2011.
Halifax Price Index however claimed that house prices fell last month and that economic uncertainty may weigh on demand.
To clear up uncertainty, we asked local estate agents for their opinion.
"The trouble with house price indices is that they are far too general. Locals might not know that Nationwide accounts for only three per cent of lending through mortgages; Halifax also represents a relatively small niche; these days there are no market leaders - so no index from any of the lenders can possibly be representative or relevant throughout the UK," said Winkworth's Andrew Dunford.
Andrew Nunn of Andrew Nunn & Associates said: "We are seeing the emergence of a tiered market where prices for prime property remains robust with plenty of demand and multiple offers at asking price and above being achieved, however secondary and tertiary property is a lot more price sensitive and requires an in depth knowledge of the local market in order to price correctly.
"School catchments areas, crime rate statistics, proximity to transport, different borough boundaries, short leases, absentee freeholders, excessive service charges etc will all play a part in correct pricing. Buyers for this type of property are cautious and all of this information is in the public domain so they will only buy homes that either totally suit there lifestyle requirements or do not come with hidden problems."
Christian Harper of OliverFinn added: "It is so easy to follow statistics and base market values on a single 'headline' article produced by an economist who is not only protecting their own firm’s interests but also reporting on national figures. On a more local level we also need to inject emotion into the calculations combined with annual 'check point' trends including school terms, bonus payments, holidays and even typical peak months of child birth and death."
March 24, 2011