Investment consultancy London Central Portfolio has launched a new index which it claims uses “the most comprehensive data available” to assess prices of properties in three areas - UK-wide, Greater London and Prime Central London.
The index is compiled by LCP and Acadata, which already works with LSL on its price indices.
The new index is based on the actual prices at which every property in England and Wales is transacted, including prices of properties bought with cash and all new builds, using Land Registry data. However it claims its forecasting model, developed over 20 years, enables it to be two months more up to date than the Land Registry’s own indices.
The index will appear each month and look at prices and volume changes for PCL, Greater London and England and Wales. It will also give an indication of how the premium sector is performing in relation to the mainstream market.
It will also look at actual prices and completions in the London and UK-wide new build markets.
“The LCPAca Residential Index has been established to address a number of conspicuous issues with existing residential indices” according to Naomi Heaton, LCP chief executive.
She has taken a combative approach to how her index will fare compared to the raft of indices already by provided by estate agencies, portals, mortgage lenders and others.
“Samples offered by high-end estate agents tend to be small and non-representative. Nationwide’s house price index represents just 12 per cent of the market, excludes cash purchases and is based on mortgage approvals not actual sales. Rightmove use asking prices data only, whilst RICS Residential Market Survey is largely qualitative. Land Registry’s own published full report is based on a restricted sample, excludes new builds and has a longer time lag” says Heaton.
“Looking to overcome these problems and provide a single reliable residential index, our new report, based on every sale transacted through Land Registry, will provide a much more accurate and in-depth analysis on how the market as a whole, including the controversial luxury and new build sectors, have really fared in Prime Central London, Greater London and England and Wales” she concludes.
The first edition of the LCPAca index, just released, shows trading volumes in Prime Central London as the lowest on record, although prices in that location grew 2.4 per cent in the final quarter of 2017, says Heaton.
Transactions in PCL are significantly down, 9.5 per cent across the past year, representing the lowest number of annual sales on record and a 34 per cent drop since 2013. PCL’s new build sector shows subdued activity; annual transactions fell 13.4 per cent.
Across Greater London average prices fell below £600,000 for the first time since 2016, following quarterly fall of 3.8 per cent. Transactions continue to decrease, too, down seven per cent over the final quarter of 2017 and 10 per cent over the year as a whole.
England & Wales sees biggest quarterly price fall since Global Financial Crisis - down 1.4 per cent in the final three months of 2017.