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The Hometrack House Price Survey

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Summary

Housing and mortgage research firm Hometrack produces its monthly House Price Survey of estate agents across Britain. All answer the same 11 questions on the same day each month. Questions asked cover issues such as what is the average selling time, what is the difference in asking prices, volumes of potential buyers registering and properties listed with the agent. One of the questions asks agents to give an achievable selling price for each of the four standard property types (flat, terraced, semi-detached and detached) in every postcode area. This information is then used to create an average property price for each property type. In producing its average house price figures it takes into account available housing stock numbers in each area, however the results are not seasonally adjusted.

Data

Hometrack claims its average monthly number of returns is around 6,000 and it aims to get at least two returns for each postcode area, however there is no independent verification of these claims. Hometrack does not make clear as to whether the data is based on estimated (average) asking prices, actual asking prices, or sales prices.

Method

The Hometrack index uses a methodology similar to the Rightmove index; the data is mix-adjusted but not seasonally adjusted, and the index employs expenditure weighting in accordance with English and Welsh housing stock.

Disadvantages

  • Information collected is not verified and relies on the honesty of those answering. Estate agents are more likely to be optimistic about prices and have a vested interest in prices going up rather than down
  • Its property prices are not seasonally adjusted so make comparisons with the same month the previous year difficult

Advantages

  • It gives a timely snapshot of house prices as it is based on current estate agent business rather than transactions completed, which are less up to date
  • By asking more questions of agents such as the number of potential buyers registering, it can give a broader view of the housing market than by simply recording changes in prices.
  • Reliable month on month data

Verdict

Although it is one of the most timely house price indices, the striking ambiguity regarding data sources and type, undermines confidence in the Hometrack index as a reliable source of property price information. However, the track record for this index is good and the trend is a good indicator of market sentiment.

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