House Price Statistics Should be Read with Care
Another day, another set of house price statistics.
Anyone reading the stats should do so with caution and look behind the figures because house price statistics hide a lot of information - so its worth going "behind the headlines" to get the actual press release and accompanying data to see what's really going on.
For example, in London right now house price inflation is massively skewed by hyper house price inflation at the very top end of the market - as city boys and girls with their ill gotten bonuses compete with Russian tycoons with their (often) ill gotten gains to out bid each other in sunny Kensington and Chelsea.
There is of course something of a spill over effect to more normal mortals of all this, but not much of one.
And so the effect of the hyper inflation at the top end is to distort the average - after all it takes 20 normal houses of £250K each to match one house of £5m.
The fact is that inflation for more run of the mill properties is not as great as the bald stats suggest.
www.lettingfocus.com
Anyone reading the stats should do so with caution and look behind the figures because house price statistics hide a lot of information - so its worth going "behind the headlines" to get the actual press release and accompanying data to see what's really going on.
For example, in London right now house price inflation is massively skewed by hyper house price inflation at the very top end of the market - as city boys and girls with their ill gotten bonuses compete with Russian tycoons with their (often) ill gotten gains to out bid each other in sunny Kensington and Chelsea.
There is of course something of a spill over effect to more normal mortals of all this, but not much of one.
And so the effect of the hyper inflation at the top end is to distort the average - after all it takes 20 normal houses of £250K each to match one house of £5m.
The fact is that inflation for more run of the mill properties is not as great as the bald stats suggest.
www.lettingfocus.com
This entry was posted by lettingfocus, on
Monday, December 11, 2006.
