The Mortgage Clinic: 'Which house price index should we trust?'

My partner and I are close to buying a property, but we're very confused by the various housing indices reporting different price falls – some say we're 10 per cent lower compared to last year yet others suggest between 6 and 8 per cent. One index suggested last week that prices in London had risen! Why is it so different? TT, Bath

One day rain, the next shine; then rain again. The house prices barometer will, as you've spotted, easily vary from week to week and succeed only in baffling buyers.

At the heart of the problem lie too many indices monitoring different stages of the sale process over various time periods, and a lack of proper explanation of each. Some look only at asking prices (Rightmove), the very earliest part of any transaction and so often an early indicator of trends, but prone to massive variations; others look at monthly mortgage approvals (Halifax and Nationwide) but across different parts of the country; yet more analyse actual sale completion prices (Land Registry), the most accurate but also slowest to emerge.

The index that suggested rising London prices was compiled by FT/Acadametrics from a variety of sources; it says prices rose by 4.6 per cent in the three months to July on an annual basis, helped by surging sales in Camden and Kensington.

"All the indices are valid and help to give some kind of perspective on what is happening in the marketplace generally," says David Hollingworth at broker London & Country. "However, when you are looking at individual properties it will always be impossible to apply a catch-all percentage drop (or rise) in value."

That's because the simple truth is that house prices vary on a street-by-street basis across the whole country; averages may be falling but some houses will still rise in value because buyers will always want them.

"Your best bet is to find out from local estate agents what you should be paying for property in your target area, and compare it to recent prices achieved by similar properties, and negotiate heavily with the vendor," advises Melanie Bien of broker Savills Private Finance. "As long as you plan to stay in the property for the long term you should be OK because prices will fall further before they start rising again."

Ray Boulger of broker John Charcol, thinks the Bank of England base rate – currently 5 per cent – could fall towards the end of the year and slide further next year. "Despite the shortage of finance, this will cause the market to bottom out in the first half of next year and so I don't think it is too early to buy, providing you drive a hard bargain; I'd aim to buy within the next six months."

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Foxed by jargon? Worried by the credit crunch? E-mail a question to mortgageclinic@independent.co.uk. We will not reveal your identity, and we cannot give specific advice. If your question is printed, you'll receive a £50 voucher from Amazon.co.uk, so you can kit out your home with anything from a lawnmower to an espresso machine. www.amazon.co.uk/homeandgarden