Property: The trouble with indexes: Building society figures are a poor guide to the value of your house. For that you must look at underlying trends, says Anne Spackman

The Nationwide and Halifax building societies have once again performed their monthly bob and curtsy on house prices, with one index rising in August as the other fell. This month it was the turn of the Nationwide to go up 0.6 per cent in August and the Halifax to fall 0.7 per cent.

The figures themselves are of little consequence. But the underlying trends have a far bigger impact. Home owners take great comfort from hearing that a cushion of equity is plumping up beneath them. A fall - or worse still, two falls in consecutive months from the Halifax - makes everyone nervous. So what is going on?

The Halifax's figures are deemed more reliable than the Nationwide's, but even the Halifax's own statisticians would admit their figures are a poor guide to the value of your house.

It has been a very odd year.

For a start, the market seems to be blowing hot and cold at all the wrong times. From December to April, normally a dull season, the market took off, with prices rising in the most affluent parts of the country. At the end of April the Halifax was predicting they would go up by 5 per cent this year. (Its figure now is a maximum of two.)

But instead of the traditional spring blossoming, everything went quiet. By contrast, August, normally the lowest of the low, saw an improvement in many areas.

The growing divide between different sectors of the market has also thrown the building societies' figures. The spring/summer gloom which descended across many parts of the country did not apply to London or much of the Home Counties, where 1994 has been a year of unmitigated recovery in sales and prices.

The touch-paper was lit at the top of the market, when Britain withdrew from the ERM two years ago, bringing foreign money back into London property.

Central London has never looked back. Prime parts of the capital, particularly Kensington and Notting Hill, have seen prices rise by 20 per cent in this year alone. John D Wood, which is particularly strong in the London market, turned a pre-tax loss of pounds 291,000 in April 1993 into a pre-tax profit of pounds 681,000 in April 1994.

In the most expensive parts of the capital prices have reached, or even exceeded, the highest values achieved at the top of the market in 1989. Knight Frank & Rutley has just sold a new house in Chelsea for pounds 7m. Firms like these expect to see the strong London market continue this autumn.

Rising prices have also filtered out into the popular 'villages' which ring the capital, with places like Wandsworth, Chiswick, Ealing, Richmond and Highgate seeing increases of 5- 10 per cent, particularly in family houses. The increases have been primarily fuelled by shortages.

The people with the money and the reason to move are generally middle- class parents with growing children, who tend to be looking for the same kinds of property. Period houses in good parts of London or in commutable country locations have been in high demand and short supply.

Corporate agents like the Halifax and the Nationwide are particularly weak in these areas and have no presence in the prime central London market at all. As a result, the market sectors which have seen the largest price rises have barely featured in the building societies' price indexes.

At the other end of the scale are the people sitting in converted flats in unpopular locations, up to their necks in negative equity. Most reports on negative equity have been based on the notion that an average 5 per cent rise in prices across the country will cancel out the negative equity of those whose properties have fallen by 5 per cent. This is sadly not so. The four-bedroom house up the road may have gone up by 10 per cent, but the price of your one-bedroom conversion has stayed the same, or even fallen.

In the latest monthly report from the Royal Institution of Chartered Surveyors, 11 per cent of the agents report four-bedroom houses are rising in value, but 14 per cent of the same agents report that the prices of flats are still falling.

Today's buyers are choosy, and the gap in value between the most and the least desirable properties has never been greater, rendering the building societies' indexes irrelevant.

So what will happen this autumn?

In those parts of the country which have yet to see a strong recovery, the pattern looks likely to remain inconsistent. Even in the best months agents have seen buyers flood in one week and disappear the next. Most admit they see no underlying trend.

Prices look set to remain stable. Even in buoyant areas buyers are driving hard bargains, and overpriced properties attract little interest.

I have my own theory for the seasonal hiccups. Increasingly, those families who can afford to move have two breadwinners. The only time they have to look at houses is at weekends and in the holidays. December, which used to rank with August as the lowest of the low, has been a strong month in the housing market for the past two years. This year August was also quite strong. I think holiday shopping for houses is likely to continue.

Meanwhile, with buyers nervous about interest rate rises and sellers nervous about getting a good price for their house, it seems unlikely that September will bring the market its seasonal blip.