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Economic Calendar Terms

Nationwide Houseprice Yy

HBOS
Halifax/Bank of Scotland plc
PO Box No. 5
The Mound,Edinburgh
EH1 1YZ
0870600–5000

Nationwide uses a statistical method, which simulates the ideal procedure. This allows Nationwide to use the constantly varying sample of mortgage approvals to produce a consistent index. Any changes are simply due to price fluctuations and not due to changes in the balance of the sample. For example, an increase in the proportion of flats and small houses could produce a fall in the simple average price (as flats tend to be cheaper), although the price of every property in the sample might actually have increased. A mix-adjusted or standardised index is not affected by such changes because the relative weight given to each characteristic of a property in the (or basket, to use an analogy with retail prices) is fixed from one period to the next.

The area of land included with the property is felt to be unimportant when valuing a property. Large acreages of garden land have surprisingly low intrinsic value unless planning permission is available for further development.