Comparison of mortgage lender house price indices
With today’s Lloyds HBOS index pointing towards slightly weakening prices at a national level, it is worth having a look at the two house price indices produced by mortgage lenders.
Following the 2008/09 price falls, the Nationwide index recovered strongly and since 2010 has flat-lined with house prices up 10.2% while the Lloyds HBOS (Halifax) index showed a far weaker recovery in 2009 and prices are only 2.4% above their lows in 2009.
Although the sample size and geographic bias of each index are not published, it is generally known that the Nationwide tends to have better coverage in London and the south of England while Halifax tends to have better coverage in the north of England.
The chart below, showing price changes since the bottom of the market, reflects this trend: Nationwide shows far stronger growth since 2009 in London and the south of England while Halifax shows much weaker growth in these markets and almost no recovery outside of London and the South East with negative price changes in Yorkshire & Humber, Scotland and the North of England.
At the moment both indices are showing a similar story with fluctuating seasonal price changes leading to flat/slightly falling annual growth but it will be worth watching the two indices in coming months to see how they deal with their regional biases with other housing market indicators pointing to a slowdown.