It is fair to say that the media can manipulate many areas of everyday life and business. They play a significant role in politics, as seen by the Brexit debacle, and they play a significant role in the way in which the UK housing market is perceived. Is that a fair comment?
House price headlines today
If you were to log onto Google News today, and almost any other day, you would see an array of house price article headlines which give a very different view of the same markets. For example today the headlines suggest:-
UK homeowners slash house prices by over £25,000 as property market slows
Southern Rail chaos hits housing prices along the routes
House prices increase for first time in eight months
There are signs London’s prime property slump is easing
Scottish house sales booming as market sees £5 billion change hands
How on earth are you supposed to get an angle on the UK housing market when different media operations report the above headlines on the same day? It is extremely easy to pick holes in these headlines such as the reference to £25,000, is this reduction on a £100,000 property or a £1 million property? How does £5 billion in Scottish house sales compare to recent figures?
You get the idea, these headlines will grab your attention but when you dig a little deeper:-
What do they mean?
What do they refer to?
What can you compare them to?
Official government statistics
The Land Registry is an official government organisation which records every house price transaction in the UK. The information is then assessed and used to create a house price index which gives you an idea of not only UK house prices but also regional house prices. For further information click on the following link:-
http://landregistry.data.gov.uk/app/ukhpi
Even though this information is not as “live” as the likes of the Halifax House Price Index or a similar index produced by Nationwide, it is based on closed deals and official prices. It makes no sense whatsoever to compare house prices in the North of England against the performance of London luxury houses. While physically they are hundreds of miles apart, realistically in terms of house prices and performance they are literally light years apart.
Checking the local market
While there is nothing wrong in keeping an eye on the UK housing market as a whole, intrinsically linked to the UK economy, your time will be better spent checking the specific area in which you are thinking of investing. Look at the infrastructure, tenant pool if renting not to mention the performance of the local economy and expansion prospects for the local business sector. Even in the midst of a dire downturn in the UK economy there will still be pockets of gold where house prices are significantly outperforming the rest of the UK. Consequently, they will be times when local property prices are significantly underperforming the UK as a whole, simply because of local issues impacting property development and rental demand.
There is certainly nothing wrong with looking further afield but when investors start comparing “apples and pears” there is a danger of getting caught up in statistics while ignoring the situation “on the ground”.