Just reinforces the often made point about the importance of doing your own research.
I had another look at the data on the DCLG, Nationwide, Halifax and UU house price indicies and put together some comparative charts by rebasing them all to Q1 2005.
In the 1st chart it can be seen that on the way up to the peak, the 4 indicies were very consistent, but obviously much less so on the way down. I think it's safe to say that is due to the smaller sample sizes and volumes which resulted in the big swings in the data sometimes seen in the surveys from one quarter to another. Also noticeable is that the DCLG index tends to lag the others by about one quarter, reflecting the different point in the house sale process at which it takes its data. The Composite HPI also shown is just the simple average of the 4 indicies at each data point.
In the 2nd chart the DCLG data has been shifted back one quarter to better reflect its time relationship to the other surveys (a value for Q1 2011 is estimated based on the average change in the other indicies). Now there is quite a remarkable consistency on the way up to the peak. The Halifax index was looking quite good up to Q3 2009 and it can be shown mathematically that is was in fact following the composite with least deviation up to that point. After that however the data becomes eratic with big swings in movement not seen in the other indicies. As it happens, on 16th Oct 2009 Lloyds Bank announced that it was selling its Halifax Estate Agency Business to Reed Rains for £1.
In the 3rd chart the Halifax data has been excluded from the point at which it seems to have become unreliable at q3 2009. The Composite HPI now shows a very smooth transition in trend across the time period and the indicies have converged again over recent quarters.
The 4th chart shows the annual rate of change in the Composite HPI data used in the 3rd chart. From this, it could be argued that house prices are curently falling at a greater rate of annual change than at any time since the rally point reached in prices in Q3 2009. If the UU index shows another reduction in Q2 2011 (as the current trend might suggest) then this would have a further negative impact on the annual rate of falls as the UU was suggesting prices were rising over the same period in 2010.
But as ever, time will tell whether that turns out to be the case.
What has surprised me most is the remarkable consistency in price movements shown by the 4 indicies up to the point when sample sizes started to fall signficantly in q3 2007. I know the reports get criticised but this is often more about how the data has been interpreted or what spin is applied in the narrative. Perhaps also worth noting is the fact that the UU index ended up having the least measured deviation from the Composite HPI over the complete time period covered.