A very average myth

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The Independent Online
A missive from the Halifax thuds on to my desk. It brings glad tidings for home owners trumpeting that prices rose by 1.1% in the first quarter. Those lucky enough to be contented owners, as opposed to desperate buyers like me, will have reason to be cheerful at this improvement. Unless you live in Scotland, Northern Ireland, Wales, the North of England, North West England, Yorkshire or Humberside. Anyone here will have seen prices fall in the first quarter by up to 3.5%. Only in the Midlands and the South have prices increased.

The North-South divide is more marked when you look at house price increases. Only in London and the South have prices risen by more than the 7.2% increase which the Halifax attributes to the nation as a whole. Everybody else has seen prices rise at a lower rate, the lowest being 1.8% - in the North.

The statistics are meaningless since there is no such thing as an average house price. That is because there is no such thing as an average house.

If anyone doubts my assertion about the relevance of these surveys then I would refer them to the analysis which the Halifax provides of bungalow prices. Although I am a fan, I wonder whether the bungalow has a role today. Having the kitchen, bathroom, bedroom and living-room within a short stroll of each other and yet being able to hold your own in conversations about loft conversions is a joy. Yet the bungalow appears to be a dying breed.

According to the Halifax survey, out of the 12 regions into which it divides the nation only two - Scotland and Northern Ireland - had sufficient new bungalows for sale to justify the publication of an average price. No region had enough pre-1919 bungalows for sale to warrant an average price and only three had prices for the period 1919-1945. That leads me to conclude that the bungalow is not much longer for this world.

But it also seems that the Halifax's analysis of house prices is unreliable. I put it to them that if the data on pre-1919 bungalows is insufficient to merit an average price on a regional basis, how on earth can they come up with a national figure of pounds 76,413 for a property in this category? In the same vein if only Scotland (average new bungalow price pounds 75,496) and Northern Ireland (average new bungalow price pounds 62,508) have enough data to warrant a regional price, how come the national average for new bungalows is pounds 77,326?

I assume that the Halifax believes that by putting the insufficient data together you can create data which becomes sufficient. I would argue that makes for flawed conclusions.

In different times I would be unmoved by the Halifax survey and its inconsistencies since in those days it was my intention to remain unmoved. However, as a prospective house buyer I think of little else than the prices of bungalows. Now that I intend to move I cannot remain unmoved.

I believe the Halifax and other pushers of house price information do the market a disservice. They present a picture of order when in reality there is chaos. Prices fluctuate not just region-by-region but street- by-street. The Halifax tells me house prices have gone up 1% in a month. My estate agent tells me that the price of the house I wanted to buy has gone up by pounds 10,000 in the last half-hour.

The Halifax would say that one transaction represents an insufficient sample. Given that I intend to buy only one house at a time I suppose I will remain an insufficient sample. Given that I have insufficient funds I suppose I am destined to be a reader of house price surveys rather than a participant in their compilation. Unless of course I move to Scunthorpe where the average price of a semi-detached house is pounds 25,000 below the national average.