Help to Buy and Staircasing Valuations

When it comes to property price averages, it can be hard to know what to believe. Every other day there are reports that seem to take a different slant – one minute house prices have experienced year on year growth, the next, it would appear that prices have ‘slumped’. Property owners are so bombarded with messages that trying to make sense of it all can be difficult.

Part of the problem stems from the various different statistics that are used to inform reports. There are several different organisations that produce regular data on house prices – from mortgage companies like Halifax and Nationwide, to property sale websites like Rightmove. The problem is that each uses a different set of data to compile its information.  Halifax and Nationwide, for example, use data from their own mortgage transactions. Even within this there are differences – with Halifax basing their data on property purchases using one of their mortgages but not including council house sales, shared ownership and help-to-buy schemes. Nationwide’s data accounts for all owner-occupier purchases. As such, both invariably offer different interpretations of the market during any given month, with neither being fully representative of all property transactions.

Property price information produced by Rightmove is based on the prices that properties are listed for sale at – which could lead to this being quite misleading as the eventual sale price achieved is often very different.

When looking at the various sources of house price data, it is important to remember that the majority of indicies take into account property prices/values from throughout the country (or at least England and Wales), meaning they will include properties from London and the South East – where values are known to be some of the most expensive – right through to areas with the lowest prices. As such, an ‘average’ valuation might not be very reflective of the average price in your area.

It’s also worth pointing out that any commercial entity that produces a house price index – such as a mortgage provider – potentially stands to lose or gain business on the back of activity in the property market, meaning they might therefore try to put a positive spin or weighting on the figures they produce.

So what should you believe?

Perhaps the most accurate measure is the actual sale values achieved across all property transactions. The Land Registry/ONS now produce a joint index based on “price paid” data on all residential properties purchased for market value in the UK. Unfortunately, there can be a delay before transactions feed into the index meaning its data is reflective of the position two or three months earlier, rather than being a snapshot of a moment in time.

In reality, all indicies have their own flaws and should only really be taken as a general guide – not something to base a decision to buy or sell property on.

If you are looking for an unbiased, up to date market valuation of your own property, a local Chartered Valuation Surveyor or RICS Registered Valuer should be your first port of call. Unlike estate agents, independent Chartered Surveyors do not have any commercial angle or incentive to value a property in a certain way – they will simply use the evidence before them and provide an impartial valuation assessment.

For more information on any of our residential property services – including RICS Homebuyer Reports, Building Survey Reports and Valuation Reports, please get in touch.


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