House price figures from the Government found the average price decreased from £161,567 in October to £159,480 in November: a 1.1% fall. The Office of the Deputy Prime Minister (ODPM), which issues a monthly set of figures, also found that house price inflation fell from 12.1% to 9.7% in the same period.
These results appear to contradict evidence from the Halifax House Price Survey which found prices still rising, albeit more slowly, up to the end of the year. However, the figures from Government are put together in a different manner and working with the Office of National Statistics the ODPM is continuing to develop how the figures are collated.
The main difference between Government house price figures and those of the Halifax and Nationwide is that the Government ones are not seasonally adjusted to take into account the annual fluctuations of the market, which always slows towards winter and picks up again in the spring.
For this reason, the report says that ‘a month on month comparison is not advised, as the series are not seasonally adjusted and comparisons over periods of less than a year will be affected by seasonal fluctuations.’
Mark Hemingway from the Halifax explained: ‘Month by month the market is still strong, so to say that house prices are falling is not strictly correct if one takes into account the necessary adjustment. However, year on year, I think everybody is seeing a slowdown and this is expected to carry on into 2004.
‘The main reasons for this being the predicted rise in interest rates, and the lack of first time buyers, which always slows the market down.’
The Halifax has been monitoring the rise and fall in the price of an imaginary typical ‘average house’ since 1983 on a monthly basis, to track trends in the market.
In contrast to this, the Government is aiming to develop a scale whereby they record each sale on its agreement to get a picture of which transactions are happening where, and how much individual properties are going for.
‘There is no right and wrong,’ continued Mr Hemingway. ‘It just depends on what you are looking for, and each set of figures provides certain particular information.’