Ministers set to choose 'more expensive' survey as official statistic
Wednesday 18th July 2012
The average UK house price rose 2.3% over the year to May to stand at £228,000 – a rise of 1.4% from April.
However, the latest house price survey from the Office for National Statistics is sharply at odds with the Government’s other ‘official’ survey from the Land Registry.
For May, the Land Registry reported an average price in England and Wales of £161,677, a monthly rise of 0.5% and an annual rise of 0.4%.
There are now clear signs that there has been unease in Whitehall over such huge discrepancies in the ‘official’ house price surveys, with the ONS set to be declared winner of the two-horse race, despite the fact that it is the Land Registry and not the ONS which is closest to the Halifax and Nationwide surveys.
The ONS survey says that annual house price growth was driven by rises of 2.6% in England and 3.5% in Wales, offset by a 1% fall in Scotland and a 10.3% fall in Northern Ireland.
However, the price rises in England were themselves driven by a 7.2% rise in London. There were also price rises of 3.4% and 2.3% in the South-East and East Midlands, but falls elsewhere – the largest being 1.6% in the North-West and 1.2% in the West Midlands.
The price of new homes also helped fuel the overall figures, shooting up by 6.2% in the year to May.
First-time buyers also paid more in May this year than last year – a rise of 2.8%, according to the ONS.
Whilst the huge variation in data between the Land Registry and ONS surveys is not explained, there has clearly been considerable discussion behind the scenes.
The ONS yesterday announced – although there are unlikely to be many that will have spotted the wording at the end of the house price survey – that from now on, it will be their survey that is to become the ‘headline National Statistic for house prices’.
The announcement says that while other “official house price indices will continue to be published .… work will be carried out to better explain how these indices will sit alongside the National Statistic”.
Furthermore, our old friend ‘seasonal adjustment’ has also been under the spotlight.
The ONS, which took over the survey from the Department of Communities and Local Government, is reviewing ‘seasonal adjustment’, and this is likely to result in ‘small revisions’ to previous surveys, going all the way back to February 2002.
However, the Land Registry index does not look as though it is to lose all its importance. The ONS notes that ‘together with the Land Registry’ house price index, its own survey ‘is one of the main house price indices used by central and local government to support decision making in the UK’.
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