You may have noticed the explosion in news coverage on London property prices when Rightmove announced that average “prices were up £50,000” in the month from mid-September”. Yes, it is frightening. Not the price rise – which is complete rubbish – but the fact that there can be an explosion in the coverage of house prices which I had thought had already reached saturation point. How naïve of me…
Now to say the stat is rubbish may be harsh as it is undoubtedly true (not that I have checked). Nevertheless it is absurd because it does not really tell us anything. Firstly the statistic is based on asking prices, so is a questionable indicator at best. Secondly we do not know on what volume of properties this happened. Thirdly, the figure was calculated over a broad area, so could be extremely misleading and cause you to make an expensive error if you believe the “noise”.
However, 24 hour news must almost by definition be noise. This is why the storm on Sunday night in the UK was predicted to be similar to 1987. It didn’t come close, but if you had shut the curtains and just watched the news channels you could have been forgiven for thinking that something marginally worse than the Apocalypse was heading your way (this is not to belittle the tragedies that occurred but I find the reporting of these somewhat distasteful).
Unfortunately hype and exaggeration are the order of the day, which is when it comes to property the following statistic/research from Knight Frank received somewhat less acknowledgement:
“House prices in prime central London increased by 0.7% in September, and have risen by 1.7% over the past quarter. The key driver for price growth continues to be the sub-£2m price bracket.”
Hmmm, not quite as exciting, I grant you, and also not to be wholly relied on either but you get my point. However, as humans, we seem to be inextricably drawn to statistics, so here are a few for fun:
- St John’s Wood and Hampstead have seen rents fall 3.3% in the past three months and down 7.6% year on year… falls have largely been precipitated by some sharp reductions in the market for family houses over £2,000 per week. (Savills)
- £21bn spent on central London residential property since Lehman’s collapse. (W.A.Ellis
- 35% of homes in UK were bought without mortgage finance in the year to September 2013 (£83bn of 237bn). In the five years to 2007 cash purchases averaged 10-15% of transaction totals. (Estates Gazette)