Government house indices poles apart once again

Friday 17th February 2012

Average house prices increased by 0.4% in December, taking the average price to £205,269.

The Communities and Local Government ‘official’ house price index showed average prices decreased by 1.6% in Wales, by 4.6% in Scotland and by 8.1% in Northern Ireland.

However, there was an increase of 0.5% in average house prices in England – but only because of the ‘London effect’.

Outside London and the South-East, the average UK price in December was £168,220, a decrease of 1.4% over the year.

Prices for new properties shot up 9.5% over 2011, and the average price for properties bought by first-time buyers increased by 1.6% to £153,393 over the year.

The CLG’s headline figure of an average price of £205,269 is completely at odds with the Land Registry’s average price for England and Wales by the end of last year at £160,384.

Both CLG’s index and the Land Registry are the Government’s ‘official’ house price indices, despite their marked differences.

*Consumers believe that house prices have fallen again this month, for the 20th consecutive time.

The Knight Frank Markit survey, which looks at consumer sentiment within 1,500 households, said that property values were perceived to have fallen in all 11 regions. The sharpest declines in confidence were in Wales and Yorkshire & the Humber.

Only 6% of all households believe their home has risen in value since January, compared with 20% who think it has fallen.

The households were evenly split on whether they expect their property to rise or fall in price over the next 12 months.