Friday, June 10, 2011

Indices methodology called into question when prices are falling.

Boulger lays into 'farce' of house price surveys

Legendary mortgage broker Ray Boulger has hit out at the ‘farce’ of seasonally adjusted house prices in surveys from the likes of Nationwide and Halifax. Boulger, of John Charcol, said the Nationwide and Halifax reports distort the market through the ‘nonsense’ of being seasonally adjusted. He hit out just before the latest survey was published this morning – the LSL Academetrics report, which says it is “derived from Land Registry house price data, seasonally and mix adjusted by property type … The prices are smoothed to show underlying trends.” But Boulger said: “The way providers of house price indices seasonally adjust their figures is a farce (or, seasonally adjusted, a comedy).

Posted by sibley's b'stard child @ 09:52 AM (1574 views)
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11 thoughts on “Indices methodology called into question when prices are falling.

  • mark wadsworth says:

    Whichever index shows the biggest falls is the most reliable, that’s simple enough.

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  • I thought we had established that Ray Boulger had been removed from the FSA listings, so he is currently un-qualified to give mortgage advice. But then again – zero credibility FSA.

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  • sibley's b'stard child says:

    Ah yes Will but remember Jack C made the distinction between giving financial advice and just so happening to get one’s opinions published in the press; after all, he can’t be held responsible if some silly-billy takes his words at face value.

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  • I agree with Boulger. Seasonal adjustments work well in normal times, when this year’s figures are roughly the same as last year’s. However at economic inflection points they can skew indices either up or down (or both depending on the time of year). We’re definitely not in normal economic times right now.

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  • YoY should be seen as the default stat – the others tend to mislead..

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  • sibley's b'stard child says:

    Be that as it may Drewster, I don’t think Boulger cares too much for statistical inconsistencies. Of course, had he been equally critical during the DCB…

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  • I should imagine Ray Boulger hasn’t thought through the logic of his own argument. Since if we should “purify” house price stats, lets also measure inflation as it is…. without any inconvenient reductions.

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  • Ray Boulger is an agent of the banks, under Charcol they arranged many thousands of liar loans, their staff signed off these applications forms without question and that was tantamount to fraud. I am surprised that many more liar loans have not gone through our court system after mortgagees default. This is why the banks are happy to ‘assist’ as much they can before repossessing houses. If I were about to be repossessed I would take the banks with me. In America they have done this.

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  • Squeal Piggy squeal.

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  • Angrymoneysaver says:

    What if mainly larger more expensive homes are selling? That must affect the “average house price”? I haven’t seen much at the lower end shifting…

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  • When the indices were saying nice things about house prices I didn’t hear him complaining.

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