Shock! Horror! Official statistics misleading!

Via RR:

The Government's official house price index, produced by the Land Registry, has been accused of misleading homebuyers and policymakers after it emerged that it excludes repossessions and auctions on the grounds that they do not reflect the 'full market value' of the sale" gasps The Graun "The latest Land Registry figures, published on Friday, showed a 10.1 per cent annual fall in prices across England and Wales, a considerably more benign figure than the indices from Halifax and Nationwide, which reveal prices falling by 15 per cent and 13.9 per cent respectively."

*sigh*

That HM Land Registry compiles figures this way has been common knowledge for ages, at least among those who take an interest in these matters. They focus on consecutive sales of the same property ('Repeat Sales Regression') and exclude repo's and auctions for a good reason. Repossessed properties sold at auctions usually sell for less than they otherwise would, so it would overstate price rises if you compared the price that developers pay for a quick sale at auction with the amount that they sell if for later on once they've tarted it up and marketed it. Now that property prices are plummeting again, to include repo's and auctions would overstate price falls.

AFAIAA, they also exclude the first sale of new builds as there is no earlier comparative. Thus the new builds that are now being sold at auction for half their original selling price haven't influenced the official figures at all.

In other words, if you are thinking of selling or buying at an auction, HM Land Registry figures are absolutely irrelevant. I'm sure that people who buy and sell at auction would be dimly aware of that. All that "policymakers" care about is propping up house prices, facts and logic don't matter to them anyway.

As to the second contention, that HM Land Registry's figures show smaller falls that the Halifax or Nationwide, that's mainly a two-month time lag thing, as I have pointed out before.

Quick check: HM Land Registry's October figures (released at the end of November) show year-on-year fall 10.1%, month-on-month 1.5%. Nationwide's August figures (released at the end of August) showed year-on-year fall 10.5% and month-on-month 1.9%, so that two-month rule still holds.

*/sigh*