Halifax

Market covered: The Halifax index covers about 25 per cent of the property market. How: Works out average prices of ‘typical’ houses each month based on mortgage approvals that the bank made that month. Figures are seasonally adjusted and mix-adjusted.

Pros: 1. Significant share of the market covered 2. Immediate snapshot of the prices being asked by sellers 3. History – has been compiled since 1983 on a monthly basis.

Cons: 1. Doesn’t cover the whole UK market. 2. No cash sales are included. 3. Possibly northern-biased, since Halifax created the index as a regional lender.

Rightmove

Market covered: Approximately 50% of UK properties up for sale at any one time. How: Records sellers’ asking prices posted on the internet site by estate agents subscribing to the service. Mix adjusted but not seasonally adjusted.

Pros: 1. Asking prices at early stage of sales process and therefore the index could give the earliest indication of market trends. 2. Includes some cash sales. 3. Significant market coverage.

Cons: 1. Heavily biased towards South East. 2. Asking prices may be very different from actual sale prices.

Assetz House Price Watch

Market covered: An amalgamation of the six ‘major’ UK house price indices: Nationwide, Halifax, Rightmove, DCLG, Land Registry and Acadametrix/FT. How: Takes the average data from the other indices, as well as recording three and six-month moving averages.

Pros: 1. Eliminates erratic movements and indicates smoother trends. 2. Useful indicator of direction.

Cons: 1.  Possible confusion over existing indices and amalgamated index.

Nationwide

Market covered: Nationwide’s index accounts for 10 per cent of the market, including Scotland. How: Calculates typical property prices monthly, based on its own mortgage approvals made for that month. Figures are seasonally adjusted, mix adjusted and volume adjusted.

Pros: 1. Includes data from all of the UK 2. Highlights recent asking prices 3. History – this index has been calculated for more than 50 years (since 1952, originally quarterly) and is well-regarded 4. Typical house is updated each year.

Cons: 1. No cash sales. 2. Based on asking prices, not actual prices agreed at sale.

HM Land Registry

Market covered:  Those properties in England and Wales which have been sold twice since 1995, including cash sales as well as mortgaged properties. Doesn’t include Scotland. How: Simple average of sale price of around 33% of properties sold in the period, with no weighting. This mathematical simplicity is appealing, but makes comparisons with previous figures potentially misleading. Figures are not seasonally adjusted, not mix-adjusted.

Pros: 1. Includes cash sales. 2.  Records actual accurate sale prices, so will be perfect once all properties qualify for inclusion.

Cons: 1. Only covers around 33% of all property sales in England and Wales (as only 33% sold twice between 1995 and now). 2. Completions can take up to three months to be processed, and the report is quarterly, so figures are not up to date 3. Doesn’t include Scotland. 4. Does not include ‘outliers’ – exaggeratedly expensive or cheap properties.

Department for Communities and Local Government (DCLG)

Market covered: Believed to use around 60% of the property prices recorded at the mortgage completion stage to create an average figure. But details are undisclosed. How: Data is supplied to the DCLG by about 50 mortgage lenders, providing anything from five to 100% of their mortgage completions. Seasonally adjusted, mix adjusted.

Pros: 1. Covers much of the property market. 2. Figures are for the actual prices achieved.

Cons: 1. The figures are at least a month out of date. 2. No cash sales included. 3.  Not the whole UK market.

Hometrack

Market covered: Information on estimated local average prices from around 4,000 estate agents. How: An average figure created from prices reported to have been accepted by sellers. Mix adjusted, but not seasonally adjusted.

Pros: 1. Recent data used in the calculations. 2.  Figures are weighted. 3. Includes some cash sales. 4. May cover about one-third of the market.

Cons: 1.  Actual sale prices may be different to prices used to calculate monthly average. 2. Not all estate agents surveyed.

Academetrics/Financial Times

Market covered: Uses Land Registry data and therefore covers the whole of England and Wales. Note that this is a combined index based on other indices rather than primary data. How: It weights information from a range of mortgage lenders and DCLG according to their past reliability in predicting Land Registry figures. The outcome from the modeling process is then smoothed to avoid month-to-month fluctuations. Seasonally adjusted and mix-adjusted. Another, ‘original’ FT Index exists which ‘forecasts’ the Land Registry data, but it is not as accurate as this one.

Pros: 1.  Irons out monthly blips to give indication of trends. 2. Gives useful comparisons with all the other current indices.

Cons: 1. The new FT House Price Index as described was only launched in October 2005, so has little track record. 2. Possible confusion over the new and original indices.