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THE EDUCATION SECTIONEvery month we look at a particular financial topic in a little more detail. This month it is house price surveys.____________________________Prices go up and down and there is not always consistency between surveys.Everyotherdayseemstobringafreshhousepricesurvey,buttheyoftenappeartomoveindifferentdirections.The surveystakedatafromdifferenttimesinthehousebuyingprocessandalsohavedifferentparameters.Sohowdo house price surveys work and which ones should you trust?Land RegistryTheLandRegistry,whichrecordsallcompletedpropertysalesinEnglandandWales,hasbeenrecordingthe price of all property sales since April 2000, although the data now goes back to January 1995.The survey features the end of the buying process when a transaction is registered.TheLandRegistryisusingsomethingcalled‘RepeatSalesRegression’tomeasurethechangeinpricesover time.Thismeansitonlymeasuresthechangeinthepriceofpropertiesthathavebeensoldbefore,toensurea proper comparison.Mostsalesareincluded,exceptforcommercialpropertiesandasmallnumberofresidentialsales,suchas those of council houses and council flats sold at a discount.Repossessions and property transfers following a divorce are excluded to avoid skewing the sample.The Land Registry produces a monthly survey, and also provides a quarterly survey to the BBC News website.Theproceedsofallthetransactionsaretottedup,andthendividedbythetotalnumberofsalestoreachan average sale price.Becauseittakesvirtuallyallresidentialpropertysalesintoaccount,theLandRegistry'sfigurescanprovidea unique insight into not only national but local prices.In fact, the Registry can provide an accurate picture of prices down to postcode level.A similar survey is produced in Scotland by the Registers of Scotland.Government price surveyThegovernmenthasitsownmonthlyhousepriceindex,issuedbytheOfficeforNationalStatistics(ONS),who only recently took over from the Department for Communities and Local Government (DCLG), It covers the whole of the UK and is based on data supplied by the Council of Mortgage Lenders.Thiscoversalargesampleofcompletedsaleswhichhavegonethroughwithamortgage,whichmeansthat cash sales are not included.TheDCLGsaysthatinthefirsthalfof2010therewereanaverageof42,000loanspermonthtohousebuyers, and the sample amounted to about 24,000 sales each month, involving 32 lenders. Thus the DCLG survey has been covering about 60% of UK sales involving a mortgage.UnliketheNationwideandHalifaxsurveyswhichareweightedaccordingtotransactions,thegovernment's survey depends much more on the total amount of money spent.RelyingonexpenditureinthiswaywillmeanthatLondonandtheSouthEast,wherehousepricesarehighest, will have a greater influence on the government's index.It takes figures from when a transaction is completed.Nationwide & HalifaxPerhapsthebestknownsnapshotsofthepropertymarketareprovidedbytwooftheUK'sbiggestmortgage lenders - the Halifax, now part of Lloyds Banking Group, and the Nationwide.Both surveys cover the entire UK, but are based on a sample of each lender's own loans each month.Thepricesmeasuredarethoseagreedatthepointwhenthemortgageisapproved,notatthelaterpointwhen the sale is completed.The Nationwide and Halifax surveys use identical statistical methods. However,becausetheyusedifferentsamplesthefiguressometimesdiverge,intermsofboththemonthlyprice changes and annual trends.LiketheDCLGsurvey,theyarebasedonlyonpropertysalesfinancedbymortgagelending,ignoringsales which are transacted on a cash basis.Royal Institution of Chartered Surveyors (Rics)Putsimply,thissurveyreflectsconfidenceinthepropertymarketratherthanwhatisactuallyhappeningto house prices.About250estateagentsintheUK,whoaremembersofRics,areaskediftheyfeelpricesintheirownareas have been rising or falling in the preceding three months.Althoughthisappearstobeasubjectivewayofmeasuringpropertypricechanges,generallyspeaking,theRics survey is the first to show any sea change in the market.Respondentsarealsoquizzedonahostofotherrelatedissues,suchaswhetherthenumberofbuyersand sellers are rising or falling.Hometrack & RightmoveBothofthesepropertyindustrybusinessesalsoproducetheirownhousepricesurveys.Hometrackwasfirstin on the act in 1999.Dataiscollectedfrom3,500estateagentofficesfromall2,200postcodedistrictsinEnglandandWales.The estate agents report whether asking prices are rising or falling. They are asked to report the "achievable selling price" for each of four standard property types in their area,Rightmove'ssurveyoperatesinacompletelydifferentway,bycollatingaskingpricesforhousesplacedonits own website over the previous month.Thefirmsaysitswebsitenowdisplays90%ofallhomesforsaleintheUKalthoughitsmonthlysurveycovers just England and Wales.However, it obviously does not reflect the prices at which properties actually sell.If you have any comments or want to get in touch please do not hesitate to contact us.