Nationwide explanation: July weakness rather than August strength
Today’s Nationwide house price index is being widely quoted as the biggest monthly jump since January 2010. However having a more detailed look at the figures takes the shine off this attention grabbing statistic.
The 1.3% monthly growth figure quoted is actually a seasonally adjusted figure and it looks like Nationwide have made their typical August adjustment by adding approx 1% to the underlying growth figure of 0.2% as August tends to be much weaker than July.
But as we can see from the chart below, house prices since March this year have been on a lower trajectory than the last two years and June/July were particularly weak as we didn’t see the run-up in prices that typically occurs during this period.
With this in mind, a more realistic explanation of the index today would be that the market has remained flat during the summer and is generally weaker than previous years.
Perhaps Nationwide also need to look at their seasonal adjustment given all the one-off events that have take place this year.
This will be one of my last blog posts at this address. I’ll soon be moving to my new home on the savills.co.uk research page (details to follow).