{"id":6608,"date":"2022-05-31T19:56:03","date_gmt":"2022-05-31T19:56:03","guid":{"rendered":"https:\/\/ifg.local\/articles\/the-state-of-the-housing-market-2022\/"},"modified":"2023-08-25T16:10:02","modified_gmt":"2023-08-25T16:10:02","slug":"the-state-of-the-housing-market-2022","status":"publish","type":"post","link":"https:\/\/www.islamicfinanceguru.com\/articles\/the-state-of-the-housing-market-2022","title":{"rendered":"The state of the housing market \u2013 2022"},"content":{"rendered":"

Most people don\u2019t pay attention to economic data and financial news.<\/p>\n

<\/p>\n

There\u2019s only one piece of financial news that props up everyone\u2019s ears, from pensioners to parents to people who just graduated.<\/p>\n

That\u2019s house prices and movement in the housing market.<\/p>\n

People already on the property ladder want to see how much equity they\u2019re building. People looking to upsize want to see how much value has been added to their house.<\/p>\n

First-time buyers watch desperately at how quickly property prices rise and the deposits and incomes needed to fill those gaps.<\/p>\n

You don\u2019t have<\/em> to invest in stocks or crypto or any financial instrument. But the one thing every single person does need is a roof over their head.<\/p>\n

The economic and financial indicators of the housing market are necessary for everyone to understand.<\/p>\n

How do we read housing market data?<\/p>\n

What\u2019s the state of the housing market? Where is the housing market headed?<\/p>\n

Let\u2019s explore.<\/p>\n

How to read housing market data<\/h2>\n

Go to any newspaper site and you\u2019ll see a few stories on the housing market every week.<\/p>\n

One headline declares monthly prices have increased and another says year-on-year prices have increased. Another article pools opinion from industry pundits giving their latest predictions, while another piece talks about the dire plight of first-time buyers.<\/p>\n

All these articles and pieces talk about prices in so many ways it can be dazzling.<\/p>\n

The reason disparate figures circulate is because these stories are based on different indices that measure slightly different aspects<\/span> of the housing market.<\/p>\n

So, the key to understanding the housing market is being able to read the different datasets and indices.<\/p>\n

House price data and indices: the basics<\/h2>\n

Most of the media focus their attention on specific indices:<\/p>\n\n\n\n\n\n\n\n\n
\n

Index<\/strong><\/p>\n<\/td>\n

\n

Data source<\/strong><\/p>\n<\/td>\n

\n

Sample size (approximately)<\/strong><\/p>\n<\/td>\n

\n

Coverage<\/strong><\/p>\n<\/td>\n

\n

What the data is based on<\/strong><\/p>\n<\/td>\n<\/tr>\n

UK House Price Index<\/td>\n\n

Registration data from HM Land Registry, Registers of Scotland and Land and Property Services Northern Ireland<\/p>\n

\n<\/td>\n

\n

100,000 a month<\/p>\n<\/td>\n

\n

UK<\/p>\n<\/td>\n

\n

Confirmed house sales<\/p>\n<\/td>\n<\/tr>\n

Nationwide<\/td>\n\n

Nationwide mortgage lending<\/p>\n<\/td>\n

\n

12,000 a month<\/p>\n<\/td>\n

\n

UK<\/p>\n<\/td>\n

\n

Mortgage approvals (by Nationwide)<\/p>\n<\/td>\n<\/tr>\n

Halifax<\/td>\n\n

Halifax mortgage lending<\/p>\n<\/td>\n

\n

15,000 a month<\/p>\n<\/td>\n

\n

UK<\/p>\n<\/td>\n

\n

Mortgage approvals (by Halifax)<\/p>\n<\/td>\n<\/tr>\n

LSL Acadata<\/td>\n\n

HM Land Registry price paid data<\/p>\n<\/td>\n

\n

80,000 a month<\/p>\n<\/td>\n

\n

England & Wales<\/p>\n<\/td>\n

\n

Registration of sale<\/p>\n<\/td>\n<\/tr>\n

Rightmove<\/td>\n\n

Advertised properties on Rightmove<\/p>\n<\/td>\n

\n

100,000 a month<\/p>\n<\/td>\n

\n

England & Wales<\/p>\n<\/td>\n

\n

Property listing<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

How to use each index<\/h2>\n

An important factor to consider when trying to read housing market data is to see how often the data in each index is published:<\/p>\n\n\n\n\n\n\n\n\n
\n

Timeliness<\/strong><\/p>\n<\/td>\n

\n

Index<\/strong><\/p>\n<\/td>\n

\n

When data is published after reference period<\/strong><\/p>\n<\/td>\n

\n

When the data is recorded<\/strong><\/p>\n<\/td>\n<\/tr>\n

Most timely<\/td>\n\n

Rightmove<\/p>\n<\/td>\n

\n

Published during reference period<\/p>\n<\/td>\n

\n

When house is advertised<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Nationwide<\/p>\n<\/td>\n

\n

1 week<\/p>\n<\/td>\n

\n

Mortgage approval<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Halifax<\/p>\n<\/td>\n

\n

1 week<\/p>\n<\/td>\n

\n

Mortgage approval<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

LSL Acadata<\/p>\n<\/td>\n

\n

2-3 weeks<\/p>\n<\/td>\n

\n

Registration of sale<\/p>\n<\/td>\n<\/tr>\n

Least timely<\/td>\n\n

UK House Price Index<\/p>\n<\/td>\n

\n

6 weeks<\/p>\n<\/td>\n

\n

Registration of sale<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

We can then categorise the indices into three categories based on what the data is based on:<\/p>\n