Keep Racing UK rates home buyers in the market guessing

the UK home prices are rising. Or that is falling. Depends on whom you ask.

Property researcher Hometrack Ltd. reported a decrease of 0.9 percent per month in October, the highest since January 2009. Mortgage lender Halifax said prices rose 1.8 percent, recovering from a fall of 3.7 percent in September. Ltd. Acadametrics up from a gain of 0.3 percent, pushing prices to highest level since June 2008.

British decide whether to buy, sell or invest in residential property are left to sift through at least seven indexes that provide different results and regularly diverge in the direction of prices. Adding to the uncertainty in a market where confidence is already low and keeps some buyers and investors out, according to Christopher Down, executive director of Hearthstone Investments Plc.

"It was very difficult to define a benchmark residential property, because there are very different rates out there," said Down, who plans to raise up to 500 million pounds (788 million U.S. dollars) for a housing fund of the United Kingdom From the following year. "The appetite to invest in the sector is undeniable, especially in the small investor."

The seven indexes only agreed on the direction of the market in five of the 22 months through October. The last time was in January, when everything indicated a price increase.

Today's figures

Halifax said today that UK house prices fell 0.1 percent in November as demand weakened and the government prepared to implement the largest spending cuts since the Second World War to reduce a record budget deficit.

The indices that cover at least three months offer a more accurate picture of the market, according to Steve Morgan, president of builder Redrow Plc. Comparison of longer periods helps to "smooth the volatility experienced today," he said. Of the seven indices used, only those produced by Halifax and Nationwide provide quarterly data.

Redrow, based in St. David's Park, Wales, use their own data to see where prices go. This shows that the values have remained stable in the second half, "said Morgan.

UK Statistics Authority is reviewing the "consistency and comparability of the two levels of government and also assess public satisfaction with the statistics of the housing market in general, the agency said in August.

Government Review

"We are thinking of official measures and the extent to which it meets the needs of users," said Jason Bradbury, chairman of the steering committee of the review. "Where there are gaps, we will be looking to see what can be done to better meet that need." The results should be published within two months, he said.

Although the government will not be able to stop lenders and providers of data rates of the publication, which could lead to a greater emphasis on the figures of three months, "said Fionnuala Earley, economist at Royal Bank of Scotland Group Plc.

"There is confusion when the data are volatile, which can happen if there is a low number of transactions or the market is at a turning point, both of which could be applied now," he said.

Down hearthstone fund says will be in a format similar to followers share index, which track the broader market movement, so it has a wide coverage that is timely too.

"The best data set we found is Acadametrics." For our purposes, we have the most complete coverage possible, but we need to be timely, "he said. It seems they have managed to square the circle between opportunity and data. It is a very thorough index. "

Partial Coverage

Acadametrics is a research company that combines data from housing transactions of the Secretariat of the United Kingdom of land and other price measures to produce an estimate for the most recent month. The number is then revised in the following months as more complete data available. It does not cover Scotland, the hearthstone Down to include in your portfolio.

The final report Acadametrics based in London, 12 November, showed that house prices rose by 6.1 percent in October from a year earlier. That was the biggest increase is indicated by any of the seven indexes. At the other end of the scale, Hometrack reported a decrease of 0.1 percent.

In the U.S., the S & P / Case-Shiller index is considered the country's standard gauge of housing prices. It is based on the average price of transactions across 20 metropolitan areas and published with a lag of two months. In Spain, buyers and sellers are primarily based on government data and Idealista.com, the country's largest property website.

Less Properties

About 600,000 homes changed hands in the UK in 2009, half the 2006 level, according to the Land Registry. About 69 percent of people in Britain own their homes.

The government's Land Registry is the only source for the actual price paid for residential property transactions in England and Wales, including those made by cash. The indices of nationwide lenders and Halifax mortgage based on that offer. Rightmove Plc, which operates the UK's largest website for residential property, offering starting prices of a sample of properties offered on the site. Some measures are based on data from England and Wales, while others search throughout the United Kingdom

The various measures also produce contrasts average house prices across the country. In November, Hometrack estimated price was about 155,000 pounds, while the Rightmove asking price was about 230,000 pounds.

Frustrated Homebuilders

Data from the Communities and Local Government department includes mortgages Council of Mortgage Lenders and excludes cash buyers, who represent 25 percent of all transactions. Data from the Land Registry is composed of properties sold at least twice since it began in 1995, with the exception of about two-thirds of floors and all new homes.

home builders in the UK say they feel frustrated with the range and volatility of the indices used because of their actions often move in the direction of an index on the day in a statement. When Halifax said house prices fell 3.7 percent in September, EMEA index fell 2.3 percent, the most in a month.

"You can almost read the data and tell any story you like," Taylor Wimpey Plc said CEO Pete Redfern, in an interview. "They all see things differently, which may lead to a rather distorted."

House price indices are a poor measure to use when investing in construction companies because it does not take into account changes in land values, which are more relevant to future earnings, said Gary Channon, Head of Phoenix Investment Partners Asset Management.

"So much noise"

"The large number of indices of housing prices in the UK creates so much noise that the real image rarely arises," Channon said in an interview. "Unfortunately, they are produced by organizations release them with the business." Phoenix has a 5 per cent of Barratt Developments Plc, the largest homebuilder in the country by volume.

Halifax offers the longest uninterrupted monthly data set of any index of UK house and usually leads rival National reporting points of inflection in the market, according to Jessica Lord, a spokeswoman for parent company Lloyds Banking Group Plc. Both are based on assessments by its own inspectors.

"The mixed pattern of monthly rise and fall so far this year is consistent with a slowdown, but not necessarily the fall, the market," he said in an e-mail.

Rightmove lists over 90 percent of homes for sale in the UK and takes the average of all listings excluding outliers, according to spokesman Matt James.

"Therefore, we are well placed to give a good early indicator of the direction the market could take," he said.

Strategic Pricing

While Rightmove is very timely, "there is often a lot of strategy in selling prices," said Earley of RBS. "Retailers do not expect to get that price."

Halifax and Nationwide data are now based on less than they were three years ago because they are offering fewer mortgages, Down said. That makes the results more volatile. Approximately 144 million pounds of mortgages were issued last year, compared with 363 million pounds in 2007, according to the Council of Mortgage Lenders.

The Land Registry does not distinguish between types of properties or the number of rooms in the houses they have, while lenders the weight of their rates according to type of property to avoid a type of house that dominates a particular month.

"There is a huge amount of data, and put everything online could be problematic, but it will eventually happen," said David Thorpe, the founder of Acadametrics, in an interview. "The government review is necessary because we have a series of indices delivered to a public that is confused. Without a huge increase in data quality is a problem without solution."