House Price Survey
Background
Hometrack provides unrivalled information solutions to the UK housing and mortgage industries. Our market leading services deliver accurate and reliable information which is vital for enhanced decision making and improved efficiency in highly complex and competitive market. We deliver automated valuations and risk analytics services to over 90% of UK mortgage lenders. We supply a range of innovative information services to organisations across the residential sector including Developers, Housing Associations, Corporate Investors and Estate Agents in addition to Local and Central Government.
In order to deliver these services the business collects large quantities of housing and valuation related data from a variety of sources. As a result we have a range of data and analysis on absolute price levels and changes in prices in a range of our products and services. One example is our Automated Valuation Model (AVM) part of which is based on a proprietary house price index. This proprietary 'AVM' index covers the whole of the UK and whilst not published for commercial reasons, out-performs all published transactional based indices in standard 'bulk' tests.
The data we publish each month on house price trends and market activity is based on a monthly survey of surveyors and estate agents right across England and Wales. This survey is unique in that it looks to collect data on house prices and other variables, such as the time taken to sell property, across all 2,330 postcode sectors in England and Wales. This approach is different to that employed by other published measures of house prices in that it tracks trends in areas where there are both strong and weak levels of market activity. Further details on the methodology employed are set out below.
Methodology
The published Hometrack house price index is based on a monthly survey of estate agents across all postcode districts across England and Wales (e.g. SE5 and CB1 etc). The business invests significant resources collecting and processing the data with six employees collecting the data for the index which includes checking and verification procedures.
The index was first published in mid 2000 and the results are based on the answers to a standard questionnaire of 11 questions which has been in place since the index was first created. The questions are designed to capture a range of variables on local market conditions as well as the average price e.g. average time to sell, achieved price as % asking price, change in property listings, change in registered applicants, viewings per sale. We look to obtain a minimum of two returns for each postcode district. In some areas we obtain many more than 2 returns. Our average monthly sample size is around 6,000 returns.
The average price data is based on the contributor's opinion on the achievable selling price for each of four standard property types in every postcode district. The price is for a given date each month and assuming a willing seller and a reasonable marketing period while taking into account current market conditions and recent transactions. The price data that is collected goes through a verification process and is then weighted up from postcode district level using Census housing stock numbers to derive an 'overall weighted average price'. The methodology means that cash buyers are implicitly included in the results. The monthly data is not seasonally adjusted.