A property statistician says portals may be inaccurately reflecting prices in some areas because of possible double-counting of properties listed with multiple agents.
Both Rightmove and Zoopla strongly refute the claim.
Michelle Ricci, co-founder of property search engine Propcision, says average house price data for parts of London, published by Rightmove and Zoopla, vary as much as £1m from the actual figures recorded in the Land Registry for the same period.
“We suspect that property portals may be including all listings rather than removing the duplicated listings. In real terms, if a £7m house is listed 10 times with 10 different agents, it is counted as 10 different £7m houses. Obviously, this will impact the calculation of the average asking price in any location” says Ricci.
She gives a number of examples to illustrate her point.
One is Rightmove’s January 2016 index which states that the average price of a property in Kensington & Chelsea is £2,256,043. “However the Land Registry, for December 2015, states that the average price of a house in Kensington and Chelsea was £1,371,086. This implies that somehow there was a £1m jump between achieved values in December 2015 and asking prices in January 2016” says Ricci.
Since it takes between three and five months between listing a property for sale and it then appearing in the Land Registry, she has gone back further to make comparisons.
Looking at Kensington and Chelsea again, Ricci says that Rightmove states that in February 2015 - a year ago - the average asking price was £2,317,078.
“To allow for transaction time, we look at the Land Registry data between April and August 2015, it states the average house price in this borough was between £1,330,959 and £1,337,073. Even after incorporating a 10 per cent gap between asking and achieved price, Rightmove’s figures are still far cry from the Land Registry’s figures - about £1m more” she says.
Ricci has also given Estate Agent Today examples from Rightmove and Land Registry data in Richmond and in Barnet, although she says the same principle applies to Zoopla as well.
“If a borough has a high number of higher priced properties listed multiple times due to the fact that it is being marketed by multiple agents, many housing indices published by property portals will count each listing as a separate listing thereby skewing the results” she insists.
“The more duplicate listings a borough has of properties that are priced above-average for that borough, the more the results published in these housing indices are incorrect” she adds.
However, the portals strongly deny that their indices are inaccurate or involve double-counting.
A spokeswoman for Rightmove told Estate Agent Today last evening that: “The gap between the two reports is because Land Registry uses the geometric mean not the arithmetic mean.”
And Zoopla’s Lawrence Hall says: “Zoopla average property values in any area (the Zed-Index) is the average of the current estimated value for every property in a given area and is not based on asking prices, so there is no double-counting in our figures.”