In stark contrast to the Nationwide and Halifax house price indices, the Acadametrics index (AcadHPI) actually rose over the month by 1.9% and now stands at 9.7% up over the last year.
The AcadHPI records all true completion prices across England and Wales only including all cash and mortgage purchases across all price ranges. It is therefore not UK wide but it does factor out regional differences as well as reflecting the wider market not just those that are reliant on lending.
According to AcadHPI the average house in England and Wales is now worth Â£222,008, which is back where it was in April 2007. It is still of course short of the February 2008 high.
According to AcadHPI January sales levels fell off a cliff in January being 52% down on Dec 2009 with only 36,000 transactions. The second worst January in the last 16 years.
But why the big difference between the lenders indices and the AcadHPI? Surely the Nationwide and Halifax cover a large enough segment of the market to make their combined average reflect the true state of the market?
This may show that those people with the cash to buy are very bullish about the housing market and are getting in while they think the prices are relatively low. With most commentators saying that prices are going to more or less stay the same or maybe fall no more than a few percentage points over the next couple of years, some cash rich buyers and speculators may be buying into high end property in nicer areas. Where cash buyers are not in the frame, purchases in which mortgages are needed will inevitably see falls.
This is borne out by the AcadHPI annual London price rise graph that shows some areas going up in price in double digit percentages. But with the upcoming Olympics who knows why people buy there. Maybe after the Olympics we will see a correction.
What the AcadHPI may not really be showing then is the average ‘Average House’ price, but rather an average skewed by a large proportion of cash buyers.