Headlines are designed to grab your attention so didn’t Rightmove do well this week! Before homeowners jack up their property prices it’s important to understand why everyone ought to take average house prices with a pinch of salt.
The press regurgitated, as I am now, their line that the average house price is now £336,073 after a 0.8% increase between May to June. This is apparently the largest increase since June 2015. Which is hardly surprising, since we then spent the next 6 years debating Brexit.
A week earlier the Office for National Statistics’ (ONS) released its April House Price Index data. This showed the average property value fell 1.9 per cent between March and April to £268,000. In anticipation of the stamp duty ending on March 31st, it is assumed buyers began to offer lower. If this is correct we could see a rise in next month’s figures due to buyers and sellers renewed hope, they could make the next deadline in 3 months.
So what does this tell us?
Firstly, Rightmove advertises property – it is not a true reflection of what property is being sold for. In contrast, the ONS statistics are based on actual sales using data from HM Land Registry. I don’t know about you but I would always stick with the facts over wishful thinking, well on this anyway.
Secondly, You can’t put too much stock on average house prices. You can only be guided by the area you are looking in and how much you are willing to pay for the property.
Prices could climb again but what the ONS housing figures show, is that it can just as easily take two steps back as it can two steps forward. I suspect, only when the stamp duty holiday dust settles and inflation rises can no longer be ignored, will we have a more stable indicator of where UK property prices really are.
For further information on how UK House Price Indexes gather their intel click HERE