House price report health warning
Readers of the Daily Express this morning were greeted with the headline that house prices are surging again and that over the last 4-weeks the average house price in Britain went up by £62 a day according to the latest Halifax House Price Report. While the team at ESPC are all for property selling, we also think it is important that buyers and sellers look behind the headlines, for example:
- The increase of £62 is the increase from September to October. A month on month increase is the most volatile measure of the housing market.
- Halifax report UK-figures. It is important to consider data relating to your local market. ESPC has already published our house price report for October. Another indicator of the difference across the UK is that the article references a favourable outlook from the Royal Institute of Chartered Surveyors (RICS). However, the same body has a report for Scotland that is not quite so bright.
With tight lending criteria and first time buyers saving their deposit, a return to house price inflation is unlikely and not what the housing market requires. The health of the property market should be measured in terms of the volume of people who are able to buy and sell property.
It is worth remembering that as most people in the housing market are looking to move up the ladder (the tendency is for small steps up the way and big leaps in the opposite direction when downsizing) rising prices do not work in their favour. If you are in a 2-bed flat and it has dropped 5% in value, a drop of the same size for a 3-bed flat works in your favour.
For more help on house prices, we have created a simple house price monitors user guide so that you can understand the differences between each one.