As we established back in May, HMLR's figures for a month (released at the end of the next month) tend to be in line with Nationwide's figures for two months previously (released at the end of that month). This rule still held in July but since then the two had diverged - HMLR's figures showed much smaller falls.
HMLR now seem to have caught up again: their September 2008 figures are month-on-month fall 2.2%, year-on-year fall 8%.
Nationwide's July figures, for comparison, were month-on-month fall 1.7%, year-on-year fall 8.1%.
Tuesday 28 October 2008
HM Land Registry versus Nationwide House Price Indices (3)
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5 comments:
Given that sales volums fave fallen to about 40% of 2007 volumes and look like they will keep falling its hard to say what any house is worth.
The recession won't end until house prices have bottomed out and sales volumes return to some normality (whatever that is). That won't happen until people get over the shock of losing so much wealth, if if it was illusory, and that will take some time.
Land Reg will tend to look like a smaller fall as well as lagging, because it excludes repossessions and new builds.
Why does it exclude new-builds? They get the data don't they? It certainly appears on the websites that use LR data.
Anyway - I note Oxfordshire's falls are only 3.8% year on year according to today's figures, which is good since the last thing I want is to have ended up buying some land on which to develop affordable houses only to find we can no longer make them any more affordable than the market. We don't have the money to lose!
JC, I suppose the logic is HMLR compare subsequent sales of the same property and interpolate.
Repo's won't usually have been repo'd before (so it would be unfair comparison); new builds won't have been sold before (so no comparative). Or at least that's their excuse. And HMLR figures include cash sales, missing from Nationwide figures. But this all evens out - which is why the two indices are so closely in line.
As to buying land, give it another couple of years!
Not my choice about the land - a gung-ho co-director who has another organization that could commit to it did so and now we are stuck with the liability to give that organization what they paid for it. And they decided to buy it because the existing owners wanted the deal done before the CGT changes and so on.
Extremely annoying and very probably not ethical by his solicitor but a relationship too sensitive to destroy over it.
The land can lose about 50% in value before we would lose even on for profit sales.
Not what I would have chosen for our first project with a site assembly problem and now a planning/water board problem that might also take two years or more to sort out.
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