The recovery from the top end is evidenced in the National Westminster Bank Valuers' Survey, which showed a sharp rise in interest in higher-priced, suburban homes during April.
It is misleading of Mr Gilchrist to claim that the Halifax sample covers all sizes and qualities of property, and that shortcomings in the extent of the sample can be catered for by mix adjusting. The Halifax sample is representative only of properties mortgaged by the Halifax Building Society. It does not weight its monthly sample according to the known distribution of house types, styles and locations across the whole UK housing market, but instead weights it to conform to a sample of Halifax mortgage transactions that took place in 1983. It cannot be said to be representative of the whole UK housing market, where 29 per cent of properties are mortgaged with banks and a further 28 per cent are bought without any mortgage.
It would be helpful if the Halifax figures were not called 'UK house price indices' but 'UK mortgage transaction price indices'. When viewed with other indicators, they help to show what is happening in the mainstream market and to demonstrate the widening gulf between good- quality, high-value properties and lower-value homes.
James Barty of Morgan Grenfell, writing on the same topic, appears somewhat naive in mistaking falling turnover for weakening demand. Anyone with experience in the housing market knows that falling turnover can equally be caused by supply shortage. It is demand pressures for high-value houses in desirable locations that are driving prices up. This is not a myth engineered by agents trying to talk up the market - ask any buyer looking for good properties anywhere south-east of Bristol to the Wash.
It is not for data providers to conceal market peculiarities or to conceal the bias or skew in their indices. The residential market is recovering, strongly, at the top end. Commentators ignore this fact at their peril.
Head of Residential Research
10 JuneReuse content