Up until 2008, the four major UK residential property indices showed very similar price trends. Since the financial crash, though, it’s a very different story, as the Financial Times explained.
Taking 2003 as a base, the top index shows a gain of 49% over the decade up to the start of 2013 while the lowest – the Halifax – posts a gain of just 29%, with most of the variation arising after 2008.
The FT explains that the divergence arises partly because of the way indices are constructed – Halifax and Nationwide use only valuations of properties on which they are lending, so they exclude cash sales, which are included in the Land Registry data. But the big factor is the decline in the number of transactions since 2007, so that the indices are based on far less data than they used to be. That means they are less reliable, especially for regional trends.