Following Nationwide’s third consecutive monthly house price rise in July, Assetz cief eecutive, Stuart Law cuts through the market volatility in the major UK house price indices, and outlines the potential risks to emerging recovery: “The latest figures from Nationwide provide the first sign of any sustained monthly price growth from a single index since the start of the downturn in Q3 of 2007. However, the differing figures released by the various UK house prices indices can create some confusion about the overall state of the market.
“The seasonal adjustments recorded by some of the indices are set at the discretion of the organisation producing them, with no formal scientific basis, which leaves room for politics in the decision on how figures are released. The result has been some major jumps in monthly growth, as previously suppressed figures are suddenly released to prevent them building up to a greater level later in the year, as seen with the sudden 2.6% Halifax index change in May.
“Taking an average figure from across the major indices offers a fairer indication of current prices. Data taken from the Assetz House Price Watch, an amalgamation of the five major UK house price indices, shows that in May and June this year house prices turned positive against figures recorded at the start of 2009.
“While the improvement from January 2009 is so far minimal, there were few pundits at the start of the year who believed we would enter positive territory for house prices at all this year, so the latest figures are encouraging and it is good to see more and more people gradually acknowledging that house price falls could well be over.”
