The ONS published this week a new – I’d say conceptually more sound – experimental house price index. It is based on the stock of homes not the flow so tells us what’s happening to the whole market not the price of what’s just been sold. The estimate of the average price is lower than under the old methodology – £194,000 compared to £215,000 in the old measure, about 10% lower. The stroke of the methodologist’s pen has made homes more affordable even though no prices have changed! Perhaps this is the time to reflect on the full range of house price estimates at our disposal – and, dare I say it, how meaningless the average numbers are? Depending on what you count and how you add the numbers up, the resulting averages can be wildly different, as much as £100,000 apart. Continue reading The price of a house – a stupid average
Yesterday I wrote about the launch of the new ONS house prices series. One huge risk was the announcement a week ago of the impending sale of the Land Registry, on whose data the new index would be based. The ONS refused to comment on this at their presentation (and the Land Registry representative was silent) fuelling concerns of those present. It seems, however, that all is not lost. The consultation document about the sale sets out to guard the data. Even so, those who lived through the loss of the PAF address register as part of the sale of Royal Mail will not be convinced that a deal can be struck until it is agreed. It seems that a purchaser is required to sign an open ended deal that would allow government to be in control of the data and set the rules about what is to be collected and how it is to be disseminated. Really? The Chancellor needs his money and a deal needs to be done ………. who has the best hand?
Today’s pre-launch of the new house price index from ONS was a disaster. The proposals lacked ambition and the new statistics (based on Land Registry prices) could well disappear next year when the Land Registry is sold. “We’re not going to speculate” about that, said the ONS, who didn’t know who would own the statistics.