New data show February house price rise

The average value of a property in England and Wales increased by 1.9% in February.

According to Acadametrics, a combined index based on the other main house price indices, this was the 10th consecutive month in which house prices rose, and leaves annual property price inflation standing at 9.7%.

The figures contradict those recorded by Nationwide and Halifax, which respectively reported a 1% and 1.5% fall in average prices for the month.

The discrepancy is explained by the fact that Acadametrics’ calculations weight information from a range of mortgage lenders and the Communities and Government figures according to their past reliability in predicting Land Registry figures, which are the definitive numbers for the housing market.

Dr Peter Williams, chairman of Acadametrics, said:

“The average price of a home rose again in February 2010 and, at £222,008, is back to where it was in April 2007, three years ago.

“The increase of 1.9% is the tenth in succession and a further step up from the previous month of January at 1.4%.

“Given that the two lender mortgage approval based indices for February showed falls of -1.0% and -1.5%, we have a clear tension as to what is really happening in the market.

“The AcadHPI for the latest month is forecast on a mix of data but, as prior months show, when more data becomes available is impressively stable and reliable.

"In seeking answers to the current divergence we would stress AcadHPI is a completion based measure, it covers England and Wales rather than the UK and it includes all properties sold including cash purchases and homes sold for over £1 million. All of these will be factors in explaining the difference.”

Acadametrics also reports that activity in the housing market was very sluggish at the start of the year, with just 36,000 transactions carried out – a 52% fall from December 2009.

The subdued market has been widely attributed to a natural fall off after the spike in buyers rushing to purchase property before the end of the Stamp Duty holiday, and January’s icy weather deterring househunters.

Williams said:

“As other indices comment and we show below, the start of 2010 was difficult for a number of reasons, and the question is whether this is a blip or the start of a new trend that completions-based indices will reflect in subsequent months.”