Why you should take house price news with a pinch of salt…


If you follow the property market, you’ll see a constant stream of new UK house price indices being released, often with contrasting results – but how accurate are they really?

Last week, news of falling house prices broke with a whopping £27bn apparently being wiped off the total UK property market since the start of 2018.

Property portal Zoopla’s latest analysis revealed that the average home in the country saw its value fall by £5.12 per day over the first six months of the year, a loss of £927 off the typical property. Although huge regional variations mean that those in the north of the country are still seeing fairly strong performance in their property markets, the news might have knocked confidence in the sector.

How do you work out value?

However, it is important to note that the methods used in compiling these house price indices varies, and while they are a great way of getting an indication of current trends and conditions, they are not an exact science.

The Zoopla house price index, for example, is actually based on the asking prices seen across its website listings. While the website claims to list every home in the UK, marking a property’s “value” based on its asking price is not an accurate reflection, as homes can and often do sell for above and below asking price. As it states on its website, Zoopla’s final results are based on estimates “calculated using a proprietary algorithm that analyses millions of data points relating to property sales and home characteristics in local geographic areas”.

Property expert Henry Pryor took to Twitter to reiterate the point that such indices do not reflect a home’s actual value:

How other indices are calculated

Halifax, Nationwide, Rightmove, the Land Registry, Hometrack and the Royal Institute for Chartered Surveyors (RICS) all release a regular index showing current house prices, but all use different methods to draw their conclusions.

For example, Halifax’s results are based on the price agreed data on property bought using a Halifax mortgage, which is then used to work out the price of a “typical house”. The results are also seasonally adjusted, which Halifax explains in its methodology: “House prices are seasonal with prices varying during the course of the year irrespective of the underlying trend in price movements. For example, prices tend to be higher in the spring and summer months when more people are looking to buy. We therefore produce seasonally adjusted series to remove this effect and to allow us to concentrate on the underlying trend in house prices.”

Nationwide calculates average house prices in a similar way, while Rightmove, like Zoopla, uses the asking prices listed on its website rather than final sale price.

The Land Registry provides perhaps one of the more comprehensive indication of house prices, in that it reports on completed sales figures for both mortgaged and cash transactions, while Hometrack’s house price index is based on a monthly survey of estate agents looking at sale prices, time it takes to sell, and discrepancies between asking and sale price.

Finally, the RICS report is compiled by questioning around 300 surveyors, meaning it is a measure of sentiment rather than solid statistics.

Highgrove Mews

High Net Yield Freehold Houses

  • Commutable to London (27 mins to central Paddington station)
  • Rental demand extremely strong with large industry presence in Reading
  • Freehold with 4% net yield

£284,955 - £457,000

St Petersgate – Stockport Manchester

New Launch - Stockport Manchester, apartments from £160,000

  • Discounted launch prices from £160,000
  • Excellent transport links with 3 trains per hour to London Euston and only 9 mins journey to Manchester Piccadilly
  • Experienced development team

Assured Rent Housing Association Leases

Assured Rent Housing Association Leases

  • Assured rent & no rental voids
  • Tenant damage cover & newly refurbished inline with requirements of a corporate sitting tenant
  • Free property and lettings management

From £62,000

Emerging Birmingham Commuter Town With Properties From Just £104,000

The emerging Birmingham commuter town where properties are selling in an average of just 24 days

  • A collection of 62 two bedroom apartments and 28 one bedroom apartments.
  • DE14 is one of the fastest selling postcodes in the West Midlands.
  • 23 minute train journey into Birmingham New Street Station.

Properties from £104,000

Mill, Stockport

The Northwest's emerging property hotspot

  • Discounted off-plan 2-bed prices from £162,000
  • Completion date - Q4 2021
  • Rental yields - 6% plus

Discounted off-plan 2-bed prices from £162,000

South Central – Birmingham City Centre Apartments

Highly anticipated 28 storey launch in Birmingham City Centre with an impressive roof garden and communal facilities.

  • 154 units across 28 storeys
  • Residential multi-media community room, gym, roof garden and sky cinema
  • Excellent future connectivity via the metro system to other key transport hubs and locations around the city

from £205,800


Talk to us

Speak to our UK property experts today: 

+44 (0) 333 123 0320

Open from 9am-6pm GMT

+852 9865 4446

Open from 9am-6pm HKT

Stamp Duty Calculator


Unlock members only investment opportunities and full development details. Join now – it’s free, quick and easy.


Not a member? Sign up for free

Why you should take house price news with a pinch of salt…

Why you should take house price news with a pinch of salt…


By submitting your details via this online form you agree to be contacted via email/phone/SMS by Direct Marketplace Ltd t/a BuyAssociation in relation to property investment and property developments . We do not share your personal details with third parties.  To view our full Privacy Policy click here.