Experts have explained the detail behind it
Experts have issued an update ahead of a key announcement on Friday
House price indices (HPIs) may grab the headlines, as we’re a nation obsessed with the value of our homes, but property and mortgage experts have warned they are only a guide to where the market is heading rather than a reflection of what your house is worth. Each month multiple house price indices are published, ranging from the Nationwide and Halifax, which are based on mortgage approvals, limited to their own customers and exclude cash buyers, to Rightmove, which is based on asking prices. The latest Halifax HPI is due out on Friday and is now known as the Lloyds House Price Index after the parents bank decided to phase out the Halifax branding.
It’s the official Land Registry HPI, which is UK-wide and based on completed sales, whether mortgaged or cash, that is widely seen as the definitive barometer of the market — but it comes with a time lag that one broker says effectively makes it “an archaeological study”. What experts agree is that while house price indices can have their uses, they also have their limits.
Mark Alexander, founder of Norwich-based Property118.com, a news and community hub for landlords, said that “house price indices are useful for identifying broad market trends, but they are a poor guide to the value of any individual property”.
He continued: “Two houses on the same street can differ in value by 20% or more depending on condition, layout, energy efficiency, lease terms, extensions or even which side of the road they’re on. HPIs should inform expectations, not determine asking prices. For buyers and sellers alike, comparable local sales and professional valuations remain far more reliable than national headlines.”
Thomas George, director of Mansell McTaggart, an estate agency covering Sussex, agreed: “House price indices tell you where the market is heading, they don’t tell you what your home is worth. Every index is an average, often an average of averages and no average can price your one home.
“The same property can appear to be worth £270,000 or £376,000 depending solely on which index you open. Rightmove prices hope, Nationwide prices mortgage approvals and the Land Registry prices reality, but even that lags by months.
“A national percentage cannot account for your specific street, condition, lease, school catchment or service charges. And if fewer high-value homes change hands in a given month, the average falls even though comparable properties haven’t lost a penny. Indices provide context, not a valuation. For that, you need someone who knows the street, not the headline.”
Manooch Suree, director of Uxbridge-based Zinga Financial Services, said he often spoke to clients “who’ve read a headline saying prices are up or down and assume their property has moved by the same amount”.
He added: “In reality, every home is different. Factors like location, condition and buyer demand can have a much bigger impact than a national average. The best guide to a property’s value is always recent comparable sales and local market knowledge, not just the latest HPI.”
Evren Ergin, founder of property valuations platform, ValuQ, agreed with George that “only the Land Registry prices reality: completed sales, every buyer”.
He continued: “So trust the Land Registry, but remember that it is a whole nation in one number and no one lives in one number. No average can price your one home.
“Two things can: what has sold on your street and what a real buyer offers when you test it. The rest is an average of strangers.”
Like others, Rohit Kohli, director of Romsey-based The Mortgage Stop, said he regularly had “clients coming in quoting a figure they’ve read in the papers and convinced they know what their property is worth”.
But he added: “More often than not, reality looks different. Land Registry-based indices give the strongest indication because they draw on completed sales, but even these can be months and months behind by the time the data is updated.
“For buyers and sellers, these indices are worth reading if you treat them as a direction of travel. What they can’t do is tell you what a specific property on a specific street is actually worth, but your local expert estate agent or surveyor can. They’re a steer, not a survey. Treat them accordingly.”
Matt Coulson, founder of Rickmansworth-based Heron Financial, stressed that “no national average is the value of your home”.
He continued: “Housing is intensely local, street by street and the only numbers that settle a deal are what a lender’s surveyor puts on your property and what a real buyer will pay. Treat the indices as a thermometer for direction and momentum, not a price tag. Used that way, they are genuinely useful. Expecting one number to value your home is asking it to do a job it was never built for.”
Darryl Dhoffer, founder of Bedford-based The Mortgage Geezer, said that when it came to HPIs, “every homeowner suddenly becomes a Wall Street hedge fund manager because the paper they read last night said house prices went up 1.2% in Leeds”.
He added: “The Land Registry is great, but by the time their data hits the news, it’s basically an archaeological study. Buyers and Sellers should stop treating national HPI averages like a personal valuation. An index is a macro trend, not a reflection of the value of your home.”
Craig Fish, director of London-based Lodestone Mortgages, said: “No two properties are truly identical, even two houses next door to each other can differ on condition, layout, aspect or what has been done to them, and an index cannot capture any of that. The solution is not to ignore the indices but to go back to a good old fashioned valuation, done locally by someone who knows the street and the property, not a national headline.”
Stephen Perkins, managing director of Norwich-based Yellow Brick Mortgages, cut to the chase: “The figure that matters most is what comparable properties are actually achieving in your local market.”
