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worried1

Price Of Average Flat Now At £250K

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Apologies if this has been posted already, but I couldn't find it.

There have been several articles about a Land Registry survey which claims that the cost of an average flat across the whole of England & Wales has hit £250k.

http://uk.finance.yahoo.com/news/average-flat-price-breaches-250-120439488.html

I just can't underatand how that can be right. Sure, there are mega-expensive flats in central London, but outside of that they seem really cheap.

I am in outer London zone 6 and I reckon the average flat price in my postcode is not any higher than £250k if you take into account all parts of the area. Certainly if you go out into the expensive parts of the commuter belt (Guildford, Sevenoaks etc) most of the flats change hands for much less than that although there are a very few 'luxury' developments that charge much more.

There was a post on here recently showing a fantastic flat carved out of mansion somewhere up north for about £120k.

Where are all of these expensive flats outside of London that make the average flat worth more than the average property overall?

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The figures discussed in the article come from the LR Quarterly Report which is not publicly available.

However we can do much the same exercise ourselves.

If we take the latest Land Registry price-sold dataset and only include sales registered in June 2013:

The average (arithmetic mean) sale price for ALL properties in England & Wales is £248,700.

The average for FLATS only is £258,900.

The average for FLATS excluding Greater London is £146,000.

The average for FLATS in Greater London only is £431,900.

Notes:

1) June is an incomplete dataset. Only about a third of sales have so far been registered.

2) The 'F' code in the LR dataset covers both flats and maisonettes.

Edit: typo

Edited by FreeTrader

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The Land Registry itself gives the following average prices for flats by region in January 2013

North West England £100,973

North East England £66,569

Yorks & Humber £103,183

East Midlands £86,493

West Midlands £91,904

Wales £91,434

East Anglia £114,198

South West England £120,013

South East England £129,883

London £332,294

http://www.landregistry.gov.uk/public/house-prices-and-sales/search-the-index

Anyone care to do the sums? Does that make an overall average of £250,000?

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1) the north is rubbish

2) 120K isnt "cheap"

1) depends which "north"

2) my flat has just fallen from £65k to £63k judging by estate agents attempts to sell a similar one in another block, though thats is still double a peak price (but that sale might have been 'RTB').

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The Land Registry itself gives the following average prices for flats by region in January 2013

North West England £100,973

North East England £66,569

Yorks & Humber £103,183

East Midlands £86,493

West Midlands £91,904

Wales £91,434

East Anglia £114,198

South West England £120,013

South East England £129,883

London £332,294

http://www.landregistry.gov.uk/public/house-prices-and-sales/search-the-index

Anyone care to do the sums? Does that make an overall average of £250,000?

Snugglybear: Those numbers will be the adjusted geometric mean – much like the figures in the LR monthly report which shows the June 2013 average for flats/maisonettes as £154,300.

My figures are the arithmetic mean and that's what the article referenced in the OP is referring too (although they don't explicitly say so - they just say that the LR quarterly report uses a different methodology than the monthly report).

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Snugglybear: Those numbers will be the adjusted geometric mean – much like the figures in the LR monthly report which shows the June 2013 average for flats/maisonettes as £154,300.

My figures are the arithmetic mean and that's what the article referenced in the OP is referring too (although they don't explicitly say so - they just say that the LR quarterly report uses a different methodology than the monthly report).

Ah, OK.

So one mean makes the June 2013 figure for flats/maisonettes £154,300 and the other makes it £250,101 - is that right?

I expect I'm being thick, but with a difference that big, aren't these figures therefore meaningless?

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Ah, OK.

So one mean makes the June 2013 figure for flats/maisonettes £154,300 and the other makes it £250,101 - is that right?

I expect I'm being thick, but with a difference that big, aren't these figures therefore meaningless?

Well, the arithmetic mean is just showing what the average is as most of us understand the word 'average', but the trouble with this is that house sales have a highly lop-sided price distribution, so mega-million pound sales in the centre of London (for example) can give a highly distorted view of what most home buyers are paying.

The figures you quoted are closer to the median price and give a better indication of what the most common type of flat is selling for.

As long as we know which methodology we're using then there's no real problem, but unfortunately different house price indexes use different ways of calculating the 'average' and this leads to a great deal of confusion when comparing one index with another (along with claims of conspiracy).

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i suspect the data is distorted because london will probably have more flats than the rest of the country combined.

flats in london are everywhere wheras you only get them right in the city centre for all other cities.

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