Positive sentiment is returning to the housing market with the main house price surveys showing increasing prices for the fourth month in a row. But what do these surveys actually show and how are they measured. Here is a snapshot of the main surveys:
Land registry – Based on their records of all completed property sales in England and Wales, this monthly and quarterly survey is fast becoming the most authoritative and comprehensive of them all. Quite simply, the proceeds of all property transactions are totted up and then divided by the total number of sales to reach an average sale price.
Nationwide and Halifax – The country’s 2 largest mortgage lenders produce their own monthly house price surveys. An average house price is calculated based on agreed sale prices for property financed by their mortgage lending. One drawback is that cash transactions are not taken into account.
Hometrack – This survey is based on data collected from around 6,000 estate agents offices across all 2,200 post code districts. The answers to 11 questions enable the team to establish not just changes in property prices but also a number of other variables such as sales to asking price ratios and transaction ratios.
Rightmove – This survey is different in so much as it is based on property asking prices. The asking prices of property placed on their website over the previous month are recorded and from this changes in the average asking price are calculated. The methodology employed on this survey means that cash buyers are also taken into account.
Royal Institution of Chartered Surveyors (RICS) – Rather than what is actually happening to house prices this survey reflects housing market confidence. Quite simply hundreds of surveyors in England and Wales are asked if they feel that prices are falling or rising. Percentages are then given to the two categories and an idea of confidence in the market is revealed.
So there you have it, each one different but all in agreement that prices are rising.
