Another index to add to our confusion

It\'s difficult to see why we need another property price index. We\'ve already got data coming out our ears from numerous respected - and sometimes not so respected - organisations and financial institutions which should be giving us as much information as we need about the state of the housing market in general and house prices in particular.

There’s the Land Registry House Price Index, the Financial Times House Price Index, the Halifax House Price Index, Home.co.uk’s Asking Price Index, the Nationwide House Price Index and Rightmove.co.uk’s House Price Index.

Then there are a number of property-related indices such as the Cost of Moving and the Next-Door Neighbour’s Cat Index – this last shows how damage done by local felines affects the overall marketability of property in various regions. Oh all right, I made that up.

But you can see my point. With so many indices already claiming to tell us how healthy or otherwise the UK housing market is, you have to wonder why Chesterton Global – an estate agent for longer than Celtic have been playing football – would want to get in on the property price index caper.

It’s a caper because every month one index comes out after the next, each trying to make the science of property prices that bit clearer to laymen and professionals but the cumulative effect is to make the overall picture murkier. It’s like taking a Lichtenstein and turning it into a Turner. You start the month with a simple idea – what the average house price is and how it has changed since the previous month. But pretty soon you find that Halifax and Nationwide are singing different songs – and Howard the bank manager is nowhere in sight. Then Rightmove arrives with massively different figures and the government’s figures often contradict the lot.

The new index doesn’t own up to being an index. It is a meta-index. Meta is a Greek word which means ‘transcending’ or ‘going above and beyond’. And you might think having to take into account another property price index is going above and beyond the call of duty as a housing professional.

If the new index has got its methodology right – and at least six rival index providers are likely to argue that it hasn’t – it will make the indices mentioned above semi-redundant. Chesterton’s index uses scientific mumbo-jumbo to align the work of the leading indices and come up with an overarching piece of monthly research.

Of course Chesterton’s meta-index can’t survive without the other indices’ data so the science of property prices will implode if one firm decides to quit the index racket. But until then we will have seven market measures to confuse us instead of six. I suppose that’s a kind of progress.