The House Builders Federation (HBF) has questioned the methodology used in the various UK house price indexes in an attempt to iron out the differences often inherent in findings by the likes of Halifax and Nationwide.
Pierre Williams, spokesman for the HBF, said: ‘We, like many others who look at the housing market, have been a little confused at the variety that is seen. We want to look at the methodology used by each and see why there are such variations. Halifax and Nationwide cannot both be correct.’
He questioned whether improvements to housing stock and shifts in regional activity were included in the indexes and if not, what impact they would have on the figures. Williams said the HBF was not planning to establish its own index, but merely establish how best to interpret the various reports. He concluded: ‘There are enough indexes as it stands.’
Mark Hemingway, spokesman for Halifax, accepted the different indexes offered different things to the consumer, but said over time both the Nationwide and Halifax figures had proved to have little discrepancy, and gave an accurate reflection of the mortgage activity in the market.
In terms of what houses are worth he suggested the Land Registry quarterly survey was a better figure to look at, but that it could be up to three months out of date due to its frequency.
The numerous estate agency surveys provide good anecdotal evidence, but being based on the properties that were on the books at the time and the asking prices ‘ which may vary from the selling prices ‘ were prone to large variations, according to Hemingway.
He added that while variations in improvement to stock and regional market activity were not included in the Halifax figures, they still gave a good impression of what was happening overall.
By excluding remortgaging activity, Hemingway also said the figures were generally kept separate from over inflation by individuals releasing equity from their property.
Builders Wimpey refused to comment on the issue.