House prices, £247 or £170

gazzabboi

http://www.telegraph.co.uk/finance/personalfinance/houseprices/10379821/UK-house-prices-hit-all-time-high-of-247000.html


http://www.thisismoney.co.uk/money/mortgageshome/article-2434792/Average-UK-house-price-surges-5-year-high-says-Nationwide.html

Can someone please explain where these nut job reporters get their figures from. Clearly there's a difference of £80k. Sometimes its the £250k average, and other times it is £170k.:mad:

THE_MASKED_TURNIP

You are aware that there are 3 different averages? It matters not one jot, as all that is important is that they are pumping upwards.

zagfles

I would imagine one's the median (ie on the 50th percentile of house prices) and the other's the mean (ie total of all prices divided by the number). The median is likely to be significantly below the mean as the few very expensive houses drive the mean up.

But you can't possibly expect property journalists to understand and explain which average they're using.

Loughton_Monkey

gazzabboi wrote: »

Can someone please explain where these nut job reporters get their figures from. Clearly there's a difference of £80k. Sometimes its the £250k average, and other times it is £170k.:mad:

The nut job reporters get their figures from valid sources. It's the valid sources who are wrong. First are the building societies and banks who do the actual lending. They just report clinically what they see day to day and what they lend on.

The much larger figure comes from the ONS. This is the government's own statistical source and produces all figures such as GDP, Unemployment rates, and inflation etc. Hence they don't report the truth, they simply ask the Prime Minister of the day what figure he wants to report.

Of course I could be wrong and it may simply be something to do with 'mix adjusted'.

chucknorris

Loughton_Monkey wrote: »

Of course I could be wrong and it may simply be something to do with 'mix adjusted'.

I think you are correct, I think the mix is usually one part gin to two parts tonic. But obviously seasoned drinkers like yourself and I are free to adjust this mix.

antrobus

gazzabboi wrote: »

...Can someone please explain where these nut job reporters get their figures from. Clearly there's a difference of £80k. Sometimes its the £250k average, and other times it is £170k.:mad:

One is quoting ONS figures, the other is quoting Nationwide numbers.

The difference in average prices is due to the different methodology used by the ONS. The ONS index is calculated on actual transaction prices, whereas the Halifax and Nationwide use mortgage approvals. The ONS figures are also higher because expensive properties in London get a larger weighting in their calculations.

http://www.bbc.co.uk/news/business-24533059

HAMISH_MCTAVISH

OK, in a probably futile effort to drag this thread back to something resembling serious discussion.....

Halifax and Nationwide: Do not quote an average house price. They use hedonic regression to create a fictional "typical" house with a standard set of characteristics.

Land Registry (free) monthly series: Do similar to Haliwide but using "repeat sales regression" to exclude new builds.

Land Registry (paid subscription) Quarterly series: Use an "average" of all sales, which is why it's usually 80K to 90K higher than the free monthly series.

ONS and Acadametrics: Provide an actual average price, with some corrective weighting to prevent skew from sales mix changes.

Rightmove: Uses an "average" of asking prices, similar to ONS and Acadametrics "average" of actual sales prices.

If you want to compare or cross reference indices.....

Rightmove, ONS, and Acadametrics are all similar in methodology and have broadly similar "average" prices, with sold prices on ONS/Acadametrics slightly below asking prices on Rightmove.

As further verification for the three above, you can cross reference against the Hometrack index which provides average percentage of asking price achieved with sold prices. This figure usually matches up quite closely with the difference between Rightmove and ONS/Acadametrics.

Halifax, Nationwide, and Land Registry monthly series also have a similar headline "average" price of a "typical" house. But it's not an average of all house prices.

Annie_Nameless

antrobus wrote: »

One is quoting ONS figures, the other is quoting Nationwide numbers.

The difference in average prices is due to the different methodology used by the ONS. The ONS index is calculated on actual transaction prices, whereas the Halifax and Nationwide use mortgage approvals. The ONS figures are also higher because expensive properties in London get a larger weighting in their calculations.

http://www.bbc.co.uk/news/business-24533059

HAMISH_MCTAVISH wrote: »

OK, in a probably futile effort to drag this thread back to something resembling serious discussion.....

Halifax and Nationwide: Do not quote an average house price. They use hedonic regression to create a fictional "typical" house with a standard set of characteristics.

Land Registry (free) monthly series: Do similar to Haliwide but using "repeat sales regression" to exclude new builds.

Land Registry (paid subscription) Quarterly series: Use an "average" of all sales, which is why it's usually 80K to 90K higher than the free monthly series.

ONS and Acadametrics: Provide an actual average price, with some corrective weighting to prevent skew from sales mix changes.

Rightmove: Uses an "average" of asking prices, similar to ONS and Acadametrics "average" of actual sales prices.

If you want to compare or cross reference indices.....

Rightmove, ONS, and Acadametrics are all similar in methodology and have broadly similar "average" prices, with sold prices on ONS/Acadametrics slightly below asking prices on Rightmove.

As further verification for the three above, you can cross reference against the Hometrack index which provides average percentage of asking price achieved with sold prices. This figure usually matches up quite closely with the difference between Rightmove and ONS/Acadametrics.

Halifax, Nationwide, and Land Registry monthly series also have a similar headline "average" price of a "typical" house. But it's not an average of all house prices.

Thanks guys. I'm particularly interested in the distinction between a 'headline' price, an 'average' price, and a 'typical' price. It is of course entirely possible that there is not a single recent house sale which was completed at any one of those three prices.

I'm not sure what Hamish seriously wants to discuss. Is it statistical theory, or is it actual house prices?

HAMISH_MCTAVISH

Annie_Nameless wrote: »

I'm not sure what Hamish seriously wants to discuss. Is it statistical theory, or is it actual house prices?

Getting confused with usernames again?;)

Annie_Nameless

HAMISH_MCTAVISH wrote: »

Getting confused with usernames again?;)

Not at all - are you?

chucknorris

HAMISH_MCTAVISH wrote: »

Getting confused with usernames again?;)

Who do you think it is Hamish?