Last week the Office for National Statistics (ONS) published
a report on house prices. In the report,
Oxford was singled-out as a market that had experienced a 4.7% fall in house
prices. Even London had done better,
much better!
I place reliance on Land Registry data – information that is
based on the houses and apartments that have sold. That data is reporting that Oxford house
prices have increased year on year by 3% based on data for the year to February
2018. A massive 7.7% spread between two
valued and supposedly trustworthy sources.
So why the 7.7% spread in house price changes?
The ONS report is based on data just for the month of
January i.e. January 2018 vs January 2017.
In-month Oxford sale prices ca
Last week the Office for National Statistics (ONS) published
a report on house prices. In the report,
Oxford was singled-out as a market that had experienced a 4.7% fall in house
prices. Even London had done better,
much better!
I place reliance on Land Registry data – information that is
based on the houses and apartments that have sold. That data is reporting that Oxford house
prices have increased year on year by 3% based on data for the year to February
2018. A massive 7.7% spread between two
valued and supposedly trustworthy sources.
So why the 7.7% spread in house price changes?
The ONS report is based on data just for the month of
January i.e. January 2018 vs January 2017.
In-month Oxford sale prices can be rather erratic, and also subject to
later revision, once the data is confirmed for all completed sales. To illustrate this point, the ONS reports
that Oxford properties increased in value by 0.7% in December 2017 but fell by
4.7% in January 2018 – quite a difference, I think you will agree. In December the ONS also reported that prices
in London’s Kensington and Chelsea had fallen by 10.7% only to revise that to
minus 6.9% in their January report.
So why is the ONS data so volatile? It is largely because of the way the data is
collated. Registrations of properties following
a sale take some time, often reaching the Land Registry months after the sale
is completed. As a result, the data
improves in accuracy over time requiring the ONS to recalculate their index
figures each month for previous months.
At the time of writing the Land Registry has just 41 sales
registered in Oxford for January 2018 compared to 117 in January 2017. That is a small sample, and one that can be
significantly affected by the actual properties included - for example, the
January 2017 data contains a few higher value properties with a sale price over
£1.2m. If the January 2018 data contains
more 2 or 3 bed roomed properties nearer the Oxford average, it is bound to
result in a poor comparison with January 2017.
It is much better to use data that is based on rolling a 12-month
period so each month’s data is based on movement over the last 12 months,
ensuring a much larger sample and avoiding erratic in month changes.
But, what can the ONS data tell us? In isolation not very much But, together with
longer-term trend data there is a definite slowing in the rate of annual growth
in Oxford’s property prices. Over the
last 4 or 5 months, the long-term trend of growth has progressively reduced
from c6% down to the February 3%. This
together with a continued reduction in total transactions points to a market
where property is expensive, and where home owners either can’t afford to move,
or are choosing to stay put and improve the property they have. It also points to a market where buyers are
taking their time to commit, reflecting a shortage in choice and caution given
the gearing required to proceed.
For home owners in a hurry to move, sensible pricing and
targeted marketing are critical.
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