Halifax house price survey.

Figures out yesterday from The Halifax suggested that house prices in January were up 1.9% but could the tiny volume of sales now mean that the usual statistics are somehow flawed? How few sales do you need before you can no longer rely on the sample?

In a usual year, around 65 houses sell in each of the 2,000 towns and cities across the UK.

At present just 30 properties are selling with volumes down by over 60% according to the Land Registry December report just out.

The Halifax calculates it’s index based on around 12,000 mortgage offers made each month. This is the equivalent of just 6 homes selling in each town or city!

I’m no statistician and whilst the Halifax House Price Index is always interesting perhaps it becomes less so as the number of homes actually selling shrinks to record lows.

There are around 730,000 individual homes on the market at present (don’t count the same property on with two different agents twice) and I calculate that fewer than 40,000 sold in December. Each estate agency office has around 60 properties on the books but is just selling one a week. One months apparent increase in prices on the previous month may be encouraging but the Halifax survey also confirms their belief that house prices are 17.2% lower than this time last year.

Sellers should not assume that values have returned to their historic levels and for many, the deals that are being done are still around 12% lower than the asking price. This suggests to me that house prices are still falling with many finding that their home will be worth what it was in 2000/2001. For these folk they will have fallen by around 50% from the peak in the summer of 2007.