The methodology used by the Nationwide to compile its house price index is to be changed from next month, with more reliance being placed on data submitted by mortgage applicants.
The move comes as a result of Nationwide no longer having on-the-spot valuations of some properties for which it is considering offering mortgage loans.
The small print of the latest house price index released this week reveals the details of the change:
“We will continue to follow the same type of statistical approach (known as ‘hedonic regression’) to calculate house prices. However, as a result of planned changes to our mortgage application process we may no longer commission physical mortgage valuation reports for all cases and so in future will source more information from customer application data. As we may not have complete or consistent information for a number of property attributes (floor area, type of garage and number of bathrooms), these variables will no longer be used in the index.”
The new methodology will not render invalid the old house price indices produced by the Nationwide, although the index says there will be some ‘joining factors’ - jargon for small changes in data - which will be undertaken to allow historical comparisons.
In future, Nationwide will publish - as now - monthly UK house price data and, every quarter, a regional breakdown too. The data will include a broad brush analysis of prices across all properties, and prices relating to two types of mover, the first timer and the owner occupier.
Nationwide will also produce quarterly figures based on different property types, and on new and existing homes.
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Automated valuations can be very useful, if done correctly. They don't necessarily have to replace on-the-spot valuations, but they're the next best thing. And they're often very accurate. Certainly the ones I've used in the past have been.
Seems sensible. As the world becomes increasingly digital, property needs to move with it. Automated valuations offer a quick and easy way to get an instant price for your house. I have no idea how accurate it is - I imagine this varies depending on who the instant valuation tool belongs to - but I think it's a sensible move by Nationwide to include this.
Not a bad idea at all. If a physical, on the spot valuation is not possible, an instant automated valuation is the next big thing. And they're mostly very reliable and accurate.
Similar sentiments to others here. Automated valuations can be a great tool when used correctly. We have them pride of place on our website and have only received positive feedback with regards to their accuracy and usefulness.
Alongside Nationwide's existing data, I think it's a necessary addition.
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