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Halifax house price figures questioned

So far this year, Halifax’s house price index has been notable for the significant rises in house prices it has reported on multiple occasions, which has led some in the industry to question the accuracy of the lender’s data.

In March this year, Halifax reported a monthly gain in house prices of 5.9 per cent, it later stated that prices had grown by 5 per cent in the three months to April, it said that in the first quarter of this year prices rose 3.2 per cent – which was later corrected to 2.6 per cent – and most recently the lender said that yearly growth in May stood at 5.2 per cent.

North London estate agent Jeremy Leaf says that while the report is a useful guide, the figures must be taken with “a pinch of salt”.

He comments: “The lender’s housing report has stood the test of time, but you always have to look to other housing reports and compare them to gauge the market properly.

“In addition, Halifax’s data reflects more of the northern housing market and therefore the figures may be skewed in that respect.

“The data is also not a reflection of the market right now as it is analysed on the month prior.”

The Mortgage Mum founder Sarah Tucker also comments. She says: “It was quite a surprise to see the article from Halifax [today] reporting an increase in property prices in May, as a week ago I read a similar article from Nationwide saying the complete opposite.”

Tucker says that while the report is useful, it is also “quite generic”. Adding that from her own results and observations she “certainly” has not seen the same trends in the South East of England.

She continues: “We are noticing that lots of properties are being down-valued and local estate agents are being forced to reduce property prices to try and secure sales.

“I would have guessed that property prices are the same as they were this time last year, and any increase has been either minimal or forced to be reduced again by lower valuation figures,” Tucker concludes.

City Finance Brokers director James Chisnall adds that there are clear variances across the country regarding house prices, and therefore “blanket national statistics” are not helpful for buyers in London.

He says: “House price indices can be fantastic indicators of the direction of travel for the housing market for industry professionals and consumers alike.

“If the headlines have made the national newspapers, then there are many people who will simply trust what they are being told.

“The most reliable source of information is from Land Registry data, rather than the much smaller sample sizes from Halifax and Nationwide, which are sourced at the mortgage approval stage.”

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