The average UK house price rose 2.3% over the year to May to stand at £228,000 – a rise of 1.4% from April.
However, the latest house price survey from the Office for National Statistics is sharply at odds with the Government’s other ‘official’ survey from the Land Registry.
For May, the Land Registry reported an average price in England and Wales of £161,677, a monthly rise of 0.5% and an annual rise of 0.4%.
There are now clear signs that there has been unease in Whitehall over such huge discrepancies in the ‘official’ house price surveys, with the ONS set to be declared winner of the two-horse race, despite the fact that it is the Land Registry and not the ONS which is closest to the Halifax and Nationwide surveys.
The ONS survey says that annual house price growth was driven by rises of 2.6% in England and 3.5% in Wales, offset by a 1% fall in Scotland and a 10.3% fall in Northern Ireland.
However, the price rises in England were themselves driven by a 7.2% rise in London. There were also price rises of 3.4% and 2.3% in the South-East and East Midlands, but falls elsewhere – the largest being 1.6% in the North-West and 1.2% in the West Midlands.
The price of new homes also helped fuel the overall figures, shooting up by 6.2% in the year to May.
First-time buyers also paid more in May this year than last year – a rise of 2.8%, according to the ONS.
Whilst the huge variation in data between the Land Registry and ONS surveys is not explained, there has clearly been considerable discussion behind the scenes.
The ONS yesterday announced – although there are unlikely to be many that will have spotted the wording at the end of the house price survey – that from now on, it will be their survey that is to become the ‘headline National Statistic for house prices’.
The announcement says that while other “official house price indices will continue to be published .… work will be carried out to better explain how these indices will sit alongside the National Statistic”.
Furthermore, our old friend ‘seasonal adjustment’ has also been under the spotlight.
The ONS, which took over the survey from the Department of Communities and Local Government, is reviewing ‘seasonal adjustment’, and this is likely to result in ‘small revisions’ to previous surveys, going all the way back to February 2002.
However, the Land Registry index does not look as though it is to lose all its importance. The ONS notes that ‘together with the Land Registry’ house price index, its own survey ‘is one of the main house price indices used by central and local government to support decision making in the UK’.
Comments
The Land Registry only covers property in England & Wales.
Is it me or does even the name Dave sound thick? They are normally the plonker in TV shows.
Same numpties posting then.
http://www.bbc.co.uk/news/magazine-17390729
china bubble burst will plunge the world into a new financial crisis...this will be the big one
Blimey, you better log on to the chinese property websites and start warning them.
japan is always on my mind...I've just taken a bet against toshiba for their exposure to china consumer who's tapped out
via credit default swop on the advice of hugh hendry
dyor
china could crash like japan japan japan
You should have told him to buy a house in Japan instead.
my point below is that he paid around 200k for a 2 bed new build in sunderland because the average price told him it was a good deal...he didn't even need to view it apparently
unfortunately it was not the average price in sinderland thats for suren as its 'halved' in value..
@nick cragg
yes...estateagency is a 'cottage industry'
the average houseprice rubbish just allowed companies like inside track to sell 2 bed flats in sunderland to let out at 'bargain prices'
whereas in burnley and other parts of the north you can buy house for 10-15k
local knowledge replaced by property mania the results of which are unknown
I've only been in property sales auctions and professional valuation and survey work for 35 years, so bow to the superior knowledge of regularly reorganised and renamed Government departments and sub departments of individuals, who seem unable to get their act together. In my humble opinion, average house prices can only be meaningful if the data includes sales and regional variations. Sales would of course include auction sales, private treaty sales and private sales. Valuations are meaningless in terms of average house prices. Regional variations reflect a slightly more representative indication of house sales price trends in those areas to which they refer. An "average", or National figure can only be of academic interest, say, to show how the regions differ from the National, because it does not apply to any one region.
".......The average UK house price......."
A different one, 0.5% up or down, from a different source every few days!
Just how meaningful is this to the general public, including estate agents, in a particular region. Even if the UK average may be useful for the governments 'big picture' , it causes confusion about the actuality in particular regions.
These 'stats' should be broken down into regions and FULLY PUBLISHED (also less frequently) to be of practical help?
The Land Registry does not include data of properties sold at auction.
I believe auction transaction data is included. Remortgage data would not have any bearing on house price index as such. I think their stats are derived from the face value of the transfer documents that are lodged for registration.
All meaningless except..............
Weakness of Land Registry stats is that they exclude remortgages and auctions don't they?
So does the ONS one include everything?
If it does then surely it has to paint a truer picture of the average house price, and so be of more value?
Doesn't it?
The LR one is far better in the sense that it is actual sale prices, but if it excludes a significant %age of sales by excluding remortgages (not a sale I know but a revaluation at that time) and auctions then it has to be flawed?