How The Main House Price Indices Gather Their Data

Indices are statistical measures of change in the economy or financial markets. Here’s a list of the main house price indices, and how they individually retrieve their statistical data.

Land registry
The Land Registery report quarterly and gather their data from the actual sale prices paid at completion.
Adjustment: no seasonal adjustment.

Financial Times (FT) House Price Index
The FT index weights information from the Halifax, Nationwide and Office of the Deputy Prime Minister according to their past reliability in predicting Land Registry figures. The output is smoothed to avoid the erratic month to month fluctuations observed in some other indices.
Adjustment: Mixed Adjustment

Halifax
This index is based on approved mortgages by the Halifax Bank of Scotland on a monthly basis. The stats are updated from the previous month’s data.
Adjustment: seasonally adjusted.

Nationwide
Like the Halifax, Nationwide also gathers their data from Mortgages they approve, also on a monthly basis.
Adjustment: seasonally adjusted.

Rightmove
This index is compiled from the asking prices of properties as they come on the market through Rightmove’s member estate agents over the previous month. The index covers half the market.
Adjustment: no seasonal adjustment.

Seasonal Adjustments
House prices are slightly seasonal - that is, prices are higher at certain times of year irrespective of the overall trend.

Where it says “seasonally adjusted”, it implies that statistical adjustments were made to accommodate predictable fluctuations during particular times of the year.

The providers say this has to be done to iron out natural changes in prices that happen every year and don’t reflect any broader trends. In the spring and autumn, for example, a traditional increase in buyers mean prices tend to edge up, even though the overall trend may be flat or even falling. Seasonal adjustment means we aren’t misled by these factors.

To view the current average house prices from these different indices, go to my financials section.

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Tips For Valuing Your Home wrote, on Jun 1st, 2008

	[...] house price statistics can actually vary drastically. There are several indices that measure house prices, and they don’t always tend to agree with one another, as they have different ways of [...]
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