Can I ask a stupid question?

Cleaver

the.ciscokid wrote: »

Well, sadly I am not looking at buying a £2Mill house for free anytime soon... (that kind of thing is reserved for warmongers such as Tony Blair , or banksters) so to me they are far more representative of the housing market I am looking at.

I only care about trend anyway, and not the specific figures.

That's a good point. I guess I just always had in my head that the average house was about £165k, whereas it's probably a lot more.

I guess they both give the 'right' answer, it just depends what question you ask.

PasturesNew

Cleaver wrote: »

I guess so. I'm still therefore wondering why Nationwide and Halifax are worth the paper they are written on then?

Marketing and PR. The reports don't have to be good, or right, but for marketing/PR purposes they have to exist. You put reports out there, findings, research, reports, figures ... in any game - and that gets your name out there, for free.

Imagine if, say, those mini-driving EAs in London started putting their monthly figures out there .... it'd raise their profile and give them fresh eyes on their website and fresh business.

So, it's all actually just another form of advertising.

Cleaver

Cleaver wrote: »

I'm glad no one apart from Gen on this thread knows the answer either. Makes me feel less stupid.

Actually, it's just like a typical MSE thread. None of us know anything, aside from Gen who does know and Graham who thinks he knows.

Only joking Dev, you big sexy b*stard.

Really2

I believe it is the only index out of the big 4 that is not seasonaly adjusted.

PasturesNew

Cleaver wrote: »

Are we meeting for a pint?

It's always good to have a backup plan if your original date's a no show. You're on fire tonight!

PasturesNew

Cleaver wrote: »

Only joking Dev, you big sexy b*stard.

You get the PMs too then!

Cleaver

Really2 wrote: »

I believe it is the only index out of the big 4 that is not seasonaly adjusted.

So a bit of seasonal adjustment causes a 40% difference?!

Graham_Devon

Cleaver wrote: »

I understand that, but the average discount from asking price to sale price isn't 40% is it? More like 10%. So it must be something else.

Yes, but Halifax etc only base it on sold properties.

If someone puts their house on rightmove, for a price of 250k, with a realistic selling price of 195k, 250k is registered.

If they never sell their house, pull it off the market as they can't sell for that price, and wait for the market to rise, Halifax never records it, but it's been recorded on rightmove.

The above house isn't worth £225k (asking price minus 10%). It's just a hopeful price.

Really2

Cleaver wrote: »

So a bit of seasonal adjustment causes a 40% difference?!

No, but I did write what I thought earlier (it was mainly not right ). I believe it makes no distinction of demographic so a 1000sq ft semi prices is made up of all prices of similar prices then divided.

Basically I think the SE skews it.

Cleaver

Graham_Devon wrote: »

Yes, but Halifax etc only base it on sold properties.

If someone puts their house on rightmove, for a price of 250k, with a realistic selling price of 195k, 250k is registered.

If they never sell their house, pull it off the market as they can't sell for that price, and wait for the market to rise, Halifax never records it, but it's been recorded on rightmove.

I understand the theory of all of this. But the vast, vast majority of houses will sell for somewhere between 90% and 100% of the asking price. Either that or they never sell. Obviously some will go for 80%, 70% or even 60% off, but they will be the tiny minority.

So even if every £250k house sells for £195k (which it doesn't, it will sell for more) then that's still only a 25% difference, whereas the difference is 40%.

I know there must be a logical reason, I'm just saying that your explanation can't be it.