The first new ‘official’ UK House Price Index, released yesterday, has received mixed reviews from the industry.On the one hand there has been a long-time demand for there to be only one official index, to replace the Land Registry and Department of Communities and Local Government indices which, in recent years, have often painted conflicting pictures of the market.
On the other hand, the new index – which started with April data revealing an annual house price increase of 8.2 per cent, taking the average property value in the UK to £209,054 – suffers from some drawbacks according to experts.
“The two main drawbacks of this index are its historic nature and its immaturity. There are no robust statistics with which to make a comparison so it is difficult to compare like-for-like. However, going forward the figures will be particularly interesting after the EU vote one way or another, and as the index starts to mature” says Jeremy Leaf, a former RICS chairman and north London estate agent.
“Despite the excitement around the first release of this new index, it hasn’t really told us anything we don’t already know, rather confirmed the property outlook portrayed by Nationwide and Halifax in previous indices” says eMoov founder and chief executive Russell Quirk.
Meanwhile Charles Curran, principal and data analyst at Maskells Estate Agents, says the use of data from the Valuation Office to compile part of the index means that in theory “the new index will make it possible to appraise [the council tax of] every home in the country at the touch of a button.”
He adds: “While the new index may be of little use, or interest to the market itself, we feel certain it will be of great use to government. Certainly this new index would allow local authorities the necessary data to consider revaluing council tax which would provide a more meaningful and sustainable revenue for cash strapped local authorities.”