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Economic Calendar Terms

Nationwide HousePrice mm

Nationwide Building Society,
Head Office,
Nationwide House,
Pipers Way,
Swindon Wiltshire
SN38 1NW

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.