Gatehouse estates

More ‘Average House Price’ rubbish from Nationwide.

I awoke this morning to a sensational news story on breakfast television that “House Prices have fallen” and there are now fresh concerns over a “Double Dip Recession”.


This ground breaking revelation that we are all doomed turns out, upon further inspection, to be based on Nationwide’s House Price Index and after months of telling us prices are rising have suggested a fall of a whopping 0.5%!

Nationwide only base their figures on Mortgages they are selling. It’s worth pointing out however that there are lots of banks and building societies providing buyers mortgages and plenty of property is still bought with cash.

At any on time there are thousands of Mortgage “deals” available to borrowers and it is worth suggesting that some are more suitable to first time buyers who, in general, spend less buying a property. What if Nationwide lent to more FTB’s in May & June (because the figures released today are already out of date) would this not bring down their average?

I appreciate that any story on the economy will always be hyped by the likes of GMTV to give them something to get excited about but, please tell the whole story!

If you are in the slightest bit interested in how these average house prices are dreamt up have a read here.

 

 
For those who are interested these are the notes from the end of Nationwide’s House Price Index!

Indices and average prices are produced using Nationwide’s updated mix adjusted House Price Methodology which was introduced with effect from the first quarter of 1995. The data are drawn from Nationwide’s house purchase mortgage lending at the post survey approvals stage. Price indices are seasonally adjusted using the US Bureau of the Census X12 method. Currently the calculations are based on a monthly data series starting from January 1991. Figures are recalculated each month which may result in revisions to historical data.

The Nationwide Monthly House Price Index is prepared from information which we believe is collated with care, but no representation is made as to its accuracy or completeness. We reserve the right to vary our methodology and to edit or discontinue the whole or any part of the Index at any time, for regulatory or other reasons. Persons seeking to place reliance on the Index for their own or third party commercial purposes do so entirely at their own risk. All changes are nominal and do not allow for inflation.

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