The government's Office for National Statitsics has confirmed that a new single, official house price index is to be launched in June, to replace existing indices currently published by the ONS itself and Land Registry for England and Wales.
It will apply to all of the UK and comes about as a result of the National Statistician recommending back in 2010 that ”a single definitive house price index and accompanying statistics should be produced by the official statistics producer community” and should be based on completion prices, should give a UK-wide picture, and be updated monthly.
There was also a recommendation for the new index to be accompanied by a clear explanation of the methods used to construct the statistics, a commentary about its results, and be easy to find and download online.
House price junkies will be delighted that, as a taster of the new index, the government has revealed a comparison of data from 2011 and how the new index methodology, if used at the time, would compare with other established indices.
So the new single index would show an average price level of £185,000 for England and Wales. This is lower than the price recorded by the current ONS HPI for England (£222,000) for the same period but still above the equivalent price levels recorded by Land Registry (£157,000 for England and Wales).
And by way of further comparison, the main privately produced house price indices by Halifax (£157,000) and Nationwide (£163,000) are also lower than the new index - although both the Nationwide and Halifax are UK averages, not just England and Wales.
Quite whether the arrival of the official house price index from June will make the housing market any more understandable is another matter - but it is something that has been called for by some in the industry for many years.
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I am so glad to hear this ''at last'' we may have a proper index we can hang our hat on! One based on COMPLETIONS for the whole market (including cash sales - 25% of the market) is what we need.
I hope the media will cease using many of the others - ''both the Nationwide and Halifax are UK averages, not just England and Wales.'' - Oh No, its MUCH worse than that - these two indices both completely ignore between 80% and 85% of all sales! They refer to THEIR mortgage OFFERS only. To my mind they are completely useless.
Well said, Rob. The problem is the Nationwide and Halifax ones seemed to be ingrained in the media reporting, despite the fact that they're not useful nor provide a full picture of the market. The new index is a step forward but its all these leechy, flimsy PR ones that will remain the problem!
Yes, a step in the right direction, but the competitors will still be there. This will mean we will continue to get conflicting data from a range of different sources. It's still so hard to be clear about what exactly is happening with house prices and the like, because each organisation says something different. Just causes more confusion and mixed messages.
And that's before you even get to seasonally-adjusted and mix-adjusted figures! :S
I must say that the only figures i am even remotely interested in are the ones for my area. The "average house price" where I work is rather lower than the "average house price" that ALL these figures refer to. We cannot have an average price index for the UK until ALL cities are taken out of the equation.
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