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TODAY'S OTHER NEWS

Pundit Henry Pryor in scathing attack on house price indices

Outspoken property commentator and buying agent Henry Pryor has made a scathing attack on some of the main house price indices.

In an article in the Daily Telegraph Pryor expresses scepticism about house prices in general, saying: “They’re little more than a finger in the air. In 35 years I’ve yet to visit ‘the average house’ and the idea one could value housing to a decimal place is absurd.” 

He believes the government’s Office for National Statistics index, based on completed sales, is the most useful although it is based on transactions which took place some months earlier. 

However, he dismisses other indices saying the monthly sentiment snapshot from the Royal Institution of Chartered Surveyors is merely “the views of 250 people and what their guts tell them” and regards those produced by mortgage lenders Halifax and Nationwide as “just kindling”.

He is joined in his wariness by another market commentator, Kate Faulkner, who runs the Propertychecklists consumer website and works closely with a number of agencies and property industry bodies. 

She tells the Telegraph: “Since 2005 we’ve seen a vast difference in property price movements, with some even within a mile moving up, others moving down while some stay the same. If one house price goes up 10 per cent and another down 10 per cent while a third stays the same, an index would say zero change - yet only one out of three would be correct.” 

The managing director of Keller Williams UK agency, Ben Taylor, is also quoted in the article saying: “Selling and buying in the same market, as most people do, means things even out. ... Most people do what they have to do. You might get two per cent more hanging on until next year but so what? ... Don’t get hung up on indices.”

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    The RICS housing market survey is indeed a sentiment survey, of RICS agents who know their market. And that’s why it is remarkable. Because if you track its data and output, it calls the market way before the LReg/Halifax data comes in to confirm what RICS said months earlier. It is the best lead indicator of the market, said Goldman Sachs.
    Sure, every data set has its limitations, but the RICS survey calls the turns in the market way earlier than the others. So long as you know how it works, it’s well worth watching.

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