UK House Prices Up or Down Depends on the Index

UK house prices were 2.1% higher in January than in December, and 5.2% higher than in January 2008, according to the latest release from the Land Registry index. This, said the organisation is the second consecutive month that house prices have notched up a year-on-year increase, and the 8th consecutive month on month increase.

According to the Land Registry this is a clear indication that house prices on the whole are rising, despite the recovery being slower in some parts than in others.

The data on UK house prices has gotten incredibly strange lately: the Nationwide index was the first one to record a price increase way back in March last year, with an increase of 0.9%. The Halifax index followed a couple of months later, and with a couple of monthly blips the two indices notched up a rising growth in the coming months.

The indices of the Land Registry and the Government (via the Department for Communities and Local Government) were the last to start recording monthly increases and have only recorded small monthly increases with a couple of exceptions. Now, when the Nationwide and Halifax are recording price rises as slowing, with Nationwide recently releasing the data showing a fall of 1% between January and February, the Land Registry is coming in with one of its biggest ever growths. It will be interesting to see what DCLG say prices did in January.

It is difficult to determine what to take from this: one the one hand we know that the indices of the DCLG and Land Registry are most accurate, because they are based on actual sales, not mortgage applications like those ran by two of the UK's largest lenders. On the other hand mortgage applications have been falling this year, which would back up the slowing of price growth found by the lenders.

So, who knows? We will just have to keep watching and nervously waiting to see exactly what effect the election has, and then what effect whichever government's cutbacks have on house prices.

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