FT Index Raises Hopes But How Accurate is it?

The Financial Times today released statistics on the UK housing market for February from its house price index. Surprisingly the FT index is not showing the same level of price declines: it puts the average price of a UK home at: £201,941, having fallen 12.9% year-on-year, and 0.8% for the month.

Many are viewing the figures with optimism over the fact that the FT index showed a slow in the annual rate of decline, echoing March's figures from the Halifax index. But it doesn't really does it?

For a start, FT's figures show a slowing rate of annual decline for February, whereas the Halifax show the annual rate falling for March.

Secondly if you look at the Land Registry index right now, it is showing a 16.5% fall in house prices in England and Wales for February, and the Halifax and Nationwide indexes are showing a similar annual decline for March. All three are showing the average price of a UK home at around the £150,000 mark.

I believe the Land Registry index to be the most accurate measure of house prices in England and Wales. The Land Registry details region by region results, as does the FT. The FT regional results also show a far lesser drop in prices than those of the Land Registry.

With FTs figures being so much different in the positive to the others it makes me wonder where the figures come from for the FT index and how accurate the index is.

It is the same optimists that are falling-over-themselves happy about the CEBR saying a further 10% drop will see UK house prices hitting rock-bottom. That is based on us already having had a 16-20% drop. So if we now take the FT index as read, then the CEBR statement will translate to a further 12-17% bottoming the market.