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‘Seasonal figures failing to show the real picture’

John Charcol senior technical manager Ray Boulger has warned economists that too much weight is being given to seasonally adjusted house price figures.

Speaking at the Building Societies Association annual conference in Manchester last week, Boulger said that a fairer assessment of the housing market is to focus on the real figures.

He said: “What I do each month is to look at the real figures which Nationwide’s house price survey also provides. If you look at that, it gives you a better picture of the housing market, a healthier picture than the seasonally adjusted figures.”

He pointed out that Nationwide reported a seasonally adjusted fall of 0.9 per cent in April but the real fall was 0.3 per cent.

For the previous month, the seasonally adjusted fall was 0.6 per cent while the real fall was 0.1 per cent.

He said: “Now if those figures had been given equal prominence, then there would have been far less sensationalism from the media.”

Nationwide chief economist Fionnuala Earley also warned delegates that the way Royal Institution of Chartered Surveyors’ data is being presented, both in the media and in RICS releases, exaggerates the current difficult market conditions.

The RICS data reports a balance detailing the percentage of estate agents which think house prices are falling. In March, the balance was 79 per cent reporting a fall rather than a rise. This number has increased to 95 per cent for the April figures released this week.

Speaking about the March figures, Earley said: “If you looked behind that number and saw how much estate agents thought house prices were falling, it was a fall of about 1 per cent over the previous three months which is exactly in line with what our index was showing. A relatively modest fall and in line with expectations. It was in no way a sensationalist number as it was presented to be.”

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