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Strange Land Registry Figures

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Admittedly maths is not my best strength, however I have noticed some inconstancies in the land reg. property prices.

I wondered if someone can shed some light on it.....

Looking at the region "WEALDEN" during last quarter of 2005 and the 1st quarter of 2006, I cant understand why they are showing that the overall average price has risen from £232141 to £239712 in this period, when they are showing that the average price of a detached house has gone down, the average price of a semi detached house has gone down and finally the average price of a flat/maisonette has gone down.

So how can the overall average price have gone up if all 3 categories have gone down in the same period?

Can someone explain this? My maths may well be letting me down here, so this could just end up as a maths/stats lecture form someone here :)

Oct - December 2005

Detached Semi-Detached Terraced Flat/Maisonette Overall

Region/Area Av Price £ Sales Av Price £ Sales Av Price £ Sales Av Price £ Sales Av Price £ Sales

WEALDEN 338777 267 205388 262 173725 139 122780 122 232141 790

Found 1 records. Displaying page 1 of 1.

Jan - Mar 2006

Detached Semi-Detached Terraced Flat/Maisonette Overall

Region/Area Av Price £ Sales Av Price £ Sales Av Price £ Sales Av Price £ Sales Av Price £ Sales

WEALDEN 330103 240 204437 193 173773 99 114972 67 239712 599

Found 1 records. Displaying page 1 of 1.

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Guest wrongmove

The LR figures are just a simple average of all the properties sold in a particular region/catagory. So, these figures just mean that a lot of expensive properties sold last quarter. These apparent anomolies occur all the time in LR figures, and is why they should be treated with great caution.

Here is a simple example of how this can happen

Q1: detached, 1 sold at 200k; semi, 1 sold at 150k; flats, 1 sold at £150k; terraces, 1 sold at £100.

Overall average is £150k (=600k/4)

Q2: detached, 2 sold for 190k each; semi, 1 sold at £145k; flats, 1 sold at 145k, terraces, 1 sold at £95k.

So the average price has gone down in every category.

But, the overall average = (190k+190k+145k+145k+95k)/5 = £153k.

So the overall average is up, despite the fact that houses seem to be (and in fact are) cheaper.

QED :P

Edited by wrongmove

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The LR figures are just a simple average of all the properties sold in a particular region/catagory. So, these figures just mean that a lot of expensive properties sold last quarter. These apparent anomolies occur all the time in LR figures, and is why they should be treated with great caution.

Here is a simple example of how this can happen

Q1: detached, 1 sold at 200k; semi, 1 sold at 150k; flats, 1 sold at £150k; terraces, 1 sold at £100.

Overall average is £150k (=600k/4)

Q2: detached, 2 sold for 190k each; semi, 1 sold at £145k; flats, 1 sold at 145k, terraces, 1 sold at £95k.

So the average price has gone down in every category.

But, the overall average = (190k+190k+145k+145k+95k)/13 = £153k.

So the overall average is up, despite the fact that houses seem to be (and in fact are) cheaper.

QED :P

Thanks, that clears that up :)

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Guest wrongmove

Thanks, that clears that up :)

Thank you for giving me the opportunity to show how misleading LR figures can be if taken at face value. :)

Edited by wrongmove

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Thank you for giving me the opportunity to show how misleading LR figures can be if taken at face value. :)

Somehow I don't think it's going to stop a certain poster from using them as evidence that prices are falling by 30%!

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Guest wrongmove

Somehow I don't think it's going to stop a certain poster from using them as evidence that prices are falling by 30%!

No, but it may help people see through the spin - bear and bull.

Another example - an FTB/BTL boom can grag the averages down:

Q1: detached, 1 sold at 200k; semi, 1 sold at 150k; flats, 1 sold at £150k; terraces, 1 sold at £100.

Overall average is £150k (=600k/4)

Q2: detached, 1 sold for 205k each; semi, 1 sold at £155k; flats, 2 sold at 155k, terraces, 2 sold at £105k.

So the average price has gone up in every category.

But, the overall average = (205k+155k+155k+155k+105k+105)/6 = £147k.

So a mini-boom has actually dragged the average down ! Unfortunately, I think this is what has happened in the Spring.

Edited by wrongmove

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Guest wrongmove

Excellent explanation Wrongmove and even if we just look at 1 category we can be misled by variations of quality. It only needs 1 luxury dwelling with all the trimmings to screw the data.

Of course. For example terraces covers anything from inner-city 2 up 2 downs to Bath Crescent. Flats can be studios to penthouses, so all these effects occur within catergories as well as across them.

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Guest wrongmove

So what is the best or most acurate measure of house prices?

That is the question !

To be fair, when looked at nationally over a reasonable time frame, all the main indices correlate very well.

Rightmove is asking prices, so really just measures what sellers want their properties to be worth. But it can provide an early warning of rises/falls.

Nationwide/Halifax are long established and measure prices at the approval stage (after surveys, but before completion). These can give a more timely measure than LR.

LR data is definitive - it contains all the transactions at the point of completion. But it is very backward looking and not mix-adjusted (see early posts).

My personal favourite is the FT-MA. The FT have a long and proven history od accurately predicting LR figures, but they also mix-adjust to avoid anomilies. It is like a mix-adjusted "sneak preview" of the LR figures.

All the above is for national figures. For very local data, there are just two few transactions to produce meaningful statistics. So you have to do your own research (DYOR) - Rightmove, local papers, estate agents, friends in the business etc.

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Guest wrongmove

It's simple. They're using the same average as is used to calculate the RPI, e.g. the average of +10.3%, +6.7%, +8.1% and +5.4% = +2.5% ;)

:P

Pretty well true - by changing the weightings (analogous to changing the housing mix), you can get any answer you want. Funny how some posters here slag of the CPI figures, yet lap up the LR ! :)

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Guest wrongmove

FT-MA.? Excuse my ignorance but what would this stand for? :ph34r:

Sorry - Financial Times Mix Adjusted - figures are on the home page of this website.

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Sorry - Financial Times Mix Adjusted - figures are on the home page of this website.

Amazing. That is pretty much the way I do it only I shunt the ODPM data back two months and only use the LR data to check for anomalies. I don’t include any London specific data as this fluctuates wildly. I don't weight the info based on past reliability in predicting either as the FT do. Oh, I don’t do the pick'n'mix thing either. Next job is to find out where the ODPM get their info from I suppose.

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Guest wrongmove

I have bumped this thread to try and put some context on the LR figures. The latest figures are not necessarily as depressing as they look because of the lack of mix and seasonal adjustment.

Just like the last figures were nothing to get excited about either.

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Guest Alright Jack

It isn't really suprising that the numbers keep getting bigger and bigger, whatever way you look at it. The amount of new lending into the sector continues to escalate. Untill that changes, expect HPI to continue.

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I have bumped this thread to try and put some context on the LR figures. The latest figures are not necessarily as depressing as they look because of the lack of mix and seasonal adjustment.

Just like the last figures were nothing to get excited about either.

Still doesn't explain the massive increase in volume of sales, its as though all the builders sold their stock back to themselves to skew the figures :o That is a huge, huge increase, not even sure it's not unprecedented....

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OK, i'm looking at the figures for Milton Keynes.

Detached prices are down again. (Yoy and QoQ).

But the volume is something else.

I've got the figures since 2002 and this is the first Q1->Q2 increase i've seen.

2002 to 2006 volume of sales are given below:

Q1 Q2

505 438

507 365

564 413

346 257

320 387

Very healthy volume there. People are still buying, there is no doubt about that.

Edited by Priff

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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