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House prices dip, says Nationwide (although apparently they rose)

House prices dip, says Nationwide (although apparently they rose)

House prices fell in August, Nationwide has reported.

The price slipped from £170,825 in July to £170,514 in August.

However, as faithfully reported by the media, Nationwide claimed that house prices actually rose by 0.6% in the month and were 3.5% higher than in August last year – when, for the record, Nationwide said the average UK house price was £164,729.

The answer of course lies in our old friend, ‘seasonal adjustment’.

However, as EAT pointed out to Nationwide when we asked for a comment as to the difference between smoke, mirrors and seasonal adjustment, the fact is that by Nationwide’s own ‘actual’ figures, house prices had gone down, not up.

A spokesman told us: “The index is the most important figure and, according to that, prices have increased. Seasonal factors have an effect on house prices so we produce a seasonally adjusted index, which seeks to remove this effect so that the overall trend is more readily apparent.

“As our index shows, average house prices across the UK have gone up.

“The average house price figure we use is not seasonally adjusted and relates to the average house price of all the properties in our survey sample.”

We’re not quite sure how this translates, other than ‘don’t let the real figures get in the way’ – which explains Nationwide’s economist Robert Gardner warning that affordability might become “stretched” if house prices continue rising.

In fact, Nationwide’s proof that house prices did rise in August is at best questionable.

Surely it’s high time ‘seasonal adjustment’ was laid to rest, along with other mythical beasts and the RICS’s tortuous net balances.

* Hometrack reported this morning that house prices rose 0.4% in August, saying that there was not the traditional seasonal downturn. It said a lack of stock is set to remain a feature of the market and will keep an upward pressure on prices. The survey does not mention any actual prices.