The first new ‘official’ UK House Price Index, released yesterday, has received mixed reviews from the industry.
On the one hand there has been a long-time demand for there to be only one official index, to replace the Land Registry and Department of Communities and Local Government indices which, in recent years, have often painted conflicting pictures of the market.
On the other hand, the new index - which started with April data revealing an annual house price increase of 8.2 per cent, taking the average property value in the UK to £209,054 - suffers from some drawbacks according to experts.
“The two main drawbacks of this index are its historic nature and its immaturity. There are no robust statistics with which to make a comparison so it is difficult to compare like-for-like. However, going forward the figures will be particularly interesting after the EU vote one way or another, and as the index starts to mature” says Jeremy Leaf, a former RICS chairman and north London estate agent.
“Despite the excitement around the first release of this new index, it hasn’t really told us anything we don’t already know, rather confirmed the property outlook portrayed by Nationwide and Halifax in previous indices” says eMoov founder and chief executive Russell Quirk.
Meanwhile Charles Curran, principal and data analyst at Maskells Estate Agents, says the use of data from the Valuation Office to compile part of the index means that in theory “the new index will make it possible to appraise [the council tax of] every home in the country at the touch of a button.”
He adds: “While the new index may be of little use, or interest to the market itself, we feel certain it will be of great use to government. Certainly this new index would allow local authorities the necessary data to consider revaluing council tax which would provide a more meaningful and sustainable revenue for cash strapped local authorities.”
The first data from the index, for April, shows that in England there was an annual price increase of 9.1 per cent which takes the average property value to £224,731. Monthly house prices rose by 0.7 per cent since March 2016.
Wales shows an annual price increase of 1.7 per cent which takes the average property value to £139,385. Monthly house prices fell by 1.9 per cent since March 2016.
London shows an annual price increase of 14.5 per cent which takes the average property value to £470,025. Monthly house prices rose by 0.6 per cent since March 2016.
London experienced the greatest increase in its average property value over the last 12 months with a movement of 14.5 per cent; the North West experienced the greatest monthly growth with an increase of 2.3 per cent; the North East saw the lowest annual price growth with an increase of 0.1 per cent; the South West saw the most significant monthly price fall with a fall of 2.8 per cent.
The number of UK home sales continued to grow in the three months to April 2016 rising by 8.3 per cent relative to the preceding three months, although sales fell by 45.2 per cent in April 2016 compared with March 2016 - no doubt thanks to the passing of the stamp duty surcharge deadline.
Sales during February 2016, the most up-to-date figures available, show that the number of completed house sales in England increased by 1.1 per cent to 56,884 compared with 56,261 in February 2015 and the number of completed house sales in Wales increased by 4.1 per cent to 2,796 compared with 2,686 in February 2015.
The number of completed house sales in London fell by 10.5 per cent to 6,926 compared with 7,740 in February.