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30 | 05 | 08

Damn lies and statistics

Posted by: katalysis

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Why isn’t there one definitive set of statistics to judge house prices by? Every month we get bombarded with figures from lenders and the estate agency industry which seem to say different things. The fact is that many house price surveys look at asking prices rather than prices actually achieved. So these can be distorted if the original asking price was unrealistically high. The best bet is to look at the Land Registry figures. These record the actual price that a property sold for. However, even these are distorted by the time lag between agreeing a deal and completing the registration which could be 2 to 3 months or so (longer in some complicated chains). So what do the stats for Wolverhampton show? For the year to April 2008 there was a very small increase in prices of the order of a percentage point or so. This means that prices actually fell in real terms when you bear in mind general increases in wages. However, the annualised figure masks more recent monthly changes which point to an increasing trend for prices to fall. In April 2008 alone there was an average fall of 1.2%. Of course averages can of themselves be misleading since they smooth out the differences between different types of property (for example our own experience is that the price of flats where there is an oversupply has been falling steeply for some time whereas more traditional properties in the mid-price range continue to generate interest but then only if marketed at the right price.)
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