Worrying discrepancies in latest housing market reports

Sales volumes up – prices down: that appears to be the story for June.

However, there are puzzling discrepancies in the two latest housing market reports.

According to the LSL Acadametrics house price index, housing market transactions soared 20% last month. They went from 52,975 in May to an estimated 63,500.

Way down on the long-term monthly average for June of 100,213 deals, the rise reverses the abnormally large drop in transactions during May.

Unlike Acadametrics, Halifax is silent on transaction levels, but hints that housing market activity has eased. It says that mortgage approvals in the three months to May were 3% lower than in the previous three months, “indicating a modest softening in housing market activity”.

Both Acadametrics, which produced its report for the first time in conjunction with LSL’s input, and Halifax yesterday were agreed in reporting falls in prices. Halifax said prices fell 0.5% in June and Acadametrics said they fell 0.6%.

Halifax has reported house price falls in four out of the last five months, with the pace of the decline increasing.

The Halifax figures show that prices are still 7.5% higher than their April 2009 low, and the average UK house price now stands at £166,203.

Acadametrics, which puts annual house price inflation at 7.7%, says house prices are in fact lower (by 5.9%) from peak, which it says was February 2008.

More concerning is the huge disparity in average house price. Halifax says it is around £166,203 whilst Acadametrics puts it at £218,000 – an unbelievable gap of £52,000.

So large is the discrepancy that, despite agreeing on other changes, the two indices once again call into question the reliability of such surveys, given the headlines they create and the rush of experts to comment.

Once again, it seems, we will have to await the Land Registry figures.

Article from: www.estateagenttoday.co.uk 09/07/10