Boulger hits out at 'farce' of house price surveys

Legendary mortgage broker Ray Boulger has hit out at the ‘farce’ of seasonally adjusted house prices in surveys from the likes of Nationwide and Halifax.

Boulger, of John Charcol, said the Nationwide and Halifax reports distort the market through the ‘nonsense’ of being seasonally adjusted.

He hit out just before the latest survey was published this morning – the LSL Academetrics report, which says it is “derived from Land Registry house price data, seasonally and mix adjusted by property type … The prices are smoothed to show underlying trends.”

But Boulger said: “The way providers of house price indices seasonally adjust their figures is a farce (or, seasonally adjusted, a comedy).

“In many months the seasonal adjustment skews the real figures so much the result is that the comment generated is often misleading.

“To help restore confidence in all UK house price statistics, not just those from Nationwide and Halifax, I suggest all providers should give at least as much prominence to the real figures as they do to the seasonally adjusted ones.”

He added: “For example, anyone who has seen some of the very bearish comments following publication of Halifax’s May House Price Index this week, could be forgiven for not realising that in the first five months of this year, the real, ie non-seasonally adjusted, Halifax house price index has actually recorded a small rise of 0.5%.

“In the same period the Nationwide real house price index recorded a rise of 3.1%.”

The Government is meant to have been conducting a long-overdue review of its own house price surveys – from CLG and the Land Registry – although it could take in other surveys as well.

However, the report should have been completed at the end of last year, and nothing has been heard of it since, as the seasons have passed through winter to spring and now summer.

Boulger called for the Government to publish ‘real’ figures alongside seasonally adjusted ones.

He said: “Whilst it is true that activity in the housing market tends to be seasonal, this doesn’t automatically mean that prices are impacted by the seasons.”

A spokesman for Nationwide said: “We think prices are seasonal. To look at individual months would not give the full picture.”

Today’s LSL Acadametrics house price survey claimed that house prices increased by an average of £20 between the end of April and end of May, to stand at £223,971. The survey gives notoriously higher figures than either Halifax or Nationwide – or, more confusingly, the Land Registry, from which it draws its data.

The Land Registry’s latest average house price figure for England and Wales, in April, stands at £163,083. The Land Registry’s monthly reports also, quote, “standardised seasonally adjusted prices”.

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