PERCENTAGE CHANGES IN HOUSE PRICES - COMPARISON OF INDICES TABLE
2009
Source
AcadHPIAcadHPI CLG
LR INDEX
NATIONWIDE
HALIFAX
RIGHTMOVE HOMETRACK
Prices* Month
F
F F
M
M
A A
M A
M A
M A
M
A
M
A
M A
M
-12.4 0.4
-11.0 -8.9 0.8 0.8
-6.6 1.1
-12.9 0.2
-15.4 0.1
-11.3 1.2
-16.3
2.5
-6.2 2.4
-9.6 0.0
-10.7 -8.5 1.6 2.5
-13.6 -11.0 0.3 2.1 -9.3 -6.2 1.1 1.4
-5.9 0.0
-8.5 0.4
-2.7 1.4
-15.0 -12.1 -10.1
-0.4 1.2 -5.5 -3.1 -0.4 0.6 -8.7 -7.7 0.0 0.0
0.8
-3.1 -2.2 -6.7 0.1
-3.8 -0.9 1.4 1.1 -4.1 -2.3 1.7 -0.5 -5.2 -2.8 1.0 1.1 0.0 2.0 0.9 0.6
-7.4 -4.7
1.5 1.1 -1.5 0.2 0.6 2.8 -5.6 -4.2 0.2 0.2
1.6 0.3 0.5 0.9 0.4 0.7 2.7 0.6
-1.6
1.3 1.6
-1.6 -2.9 0.2
5.2 1.9 2.9 0.2 2.9 0.1 5.9 0.6
1.1
0.8 1.7
2010
Annual May 09 Jun 09 Jul 09 Aug 09 Sep 09 Oct 09 Nov 09 Dec 09 Jan 10 Feb 10 Mar 10 Apr 10
A
7.8 10.7 12.0 12.9 1.6 6.4
1.9 7.8
3.5 -1.4 5.3 2.1 8.6
7.5
1.3 -1.0
3.6
-2.2 -1.9 0.1
-1.0 0.1
0.4 -1.6 4.1 0.4
4.5
6.1
3.2 0.4 0.3
nnn Apr 10 initial AcadHPI “forecast” index based upon the “index of indices” model. The AcadHPI “forecast” index is accuracy monitored. nnn Mar 10 AcadHPI “updated” index based upon the c.85% of factual Mar transactions reported in Mar/Apr to replace the Mar AcadHPI “forecast” index, as published in the Mar AcadHPI.
nnn Feb 10 AcadHPI “updated” index based upon the c.90% of factual Feb transactions reported in Feb/Mar/Apr to replace the Feb AcadHPI “updated” index, as published in the Mar AcadHPI.
nnn Jan 10 AcadHPI “final” index based upon the c.95% of factual Jan transactions reported in Jan/Feb/Mar/Apr to replace the Jan AcadHPI “updated” index, as pub- lished in the Mar AcadHPI. The AcadHPI “final” index comprises the virtually complete Land Registry published house price data for England and Wales, smoothed, seasonally and mix adjusted.
nnn Land Registry House Price Index using a repeat sales sample of LR data and repeat sales methodology launched Oct 06. The back data shown above are updated in accordance with the revisions included in the latest news release. Source acknowledgement: information produced by Land Registry. © Crown copyright material reproduced with the permission of Land Registry.
nnn based upon a sample of mortgage completion prices, CLG monthly data are mix adjusted but not seasonally adjusted, and are for England and Wales.
nnn based upon a sample of agreed prices (Nationwide) and of mortgage offer prices (Halifax), for the U.K., seasonally and hedonically mix adjusted.
nnn
nnn based upon a survey of estate agents’ estimated local prices (Hometrack) and on an index of internet asking prices (Rightmove) for England and Wales, nnn not seasonally adjusted.
* F= Final, M=at Mortgage Offer, A=Asking
© Acadametrics Limited
Sometimes the differences in valuations
are quite large but in others they are very small. For example, we recently had a case where the client argued that the property was worth another £5k, which would have allowed an increased release of a further £1,500 approximately.
All the comparisons given by the valuer and independently verified by us showed that the valuation was correct and yet the client is contemplating not proceeding because of this difference.
One might suggest that for the
difference in release, this is not really a ‘deal-breaker’ and one would suspect in most cases, it will not be.
emotions
However this demonstrates how emotions rather than rational thought often play a part and in order to maintain a sustainable advice model these aspects must be professionally handled. Although not always easy, advisers need to manage their client expectations and emotions to help them achieve the best outcome – ‘tough love’ is often what is required here. All in all one can understand that a client wants the highest valuation they can possibly achieve for their property. However, there comes a point where this can become unrealistic and it is in all our best interests to work together to explain that house price indices and local asking prices are often
not the best indication of what might be an achievable value in today’s market. We should also not forget that house prices could fall back again over the next few years; given the expected tightening of fiscal policies from the new Government and possible increased unemployment; in this scenario the saying ‘a bird in the hand is worth two in the bush’ comes to mind and now may well be the best time to release equity. Therefore, helping the client work towards a realistic understanding of their property’s value will certainly benefit all parties when it comes to submitting applications and receiving the independent valuers’ own valuation figure. n
mortgage introducer JUNE 2010 29
0.4 7.5
0.1 -0.6 9.2
9.0 10.5 1.0
5.2
1.0
6.6
1.0 -0.1 5.3 0.1 1.3 0.3
6.0 2.6 1.8 0.2
0.5
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