Morning Line: Are house prices falling for you?

The house price animal is on the move again. An homogenous beast, at least according to those who carefully watch and chart its movements, it lurches up and down in broad sweeping movements.

This time, everyone is agreed, the house price trend is most certainly downward. Surveyors quizzed by Rics joined the rest of the house price charting community to announce that the average price was declining today. The story made it onto the front of several national newspapers, coming as it does after the other main indices also broadly showed falls in prices. It also adds to fears for the economy.

Supply is rising while demand is dropping. This has broadly seen house prices start to fall over the past few months, we can conclude from the figures coming from Nationwide, Halifax, Land Registry and Rics.

A lot of the fall can be attributed to expectations of what might be. Estate agents say that reports of falling house prices are scaring away buyers. Lenders expect mortgage availability to fall back in the coming months as they anticipate that it will be tougher for them to get wholesale funding. Workers, particularly those in the public sector, can expect more job losses, particularly as the government’s spending cuts take hold.

Rics and the other house price index publishers also point to an increased number of sellers since the abolition of home information packs towards the end of May. But might this more likely be a result of the certainty (relative as it was with a coalition being formed) created by election result a few weeks before? Have homeowners not lost perspective if they time their attempt to sell up on the basis of a measly HIP while there is so much uncertainty over the economy and spending cuts – uncertainty which is so much more relevant to the path of house prices.

Besides, what does the news of house price falls matter to you anyway? Are you selling or buying a sample of houses representative of the average in the country? More likely you might have a house in London, for example, where Rics reckons that prices are still rising. Or in the north west where the same thing is happening. Maybe you are a first-time buyer looking for a place in the south west, but prices are said to be stable there so again the house price decline headlines don’t apply. The difference between prices in different regions is growing and will continue to do so as the cuts in public sector jobs take their toll.

The main message that house prices as a whole are falling is hard to argue with – and as an economic indicator or broad indication of house price trends is useful. But for those looking to buy or sell a house in a particular street in a particular region, this lumping together of forecasts (in the case of Rics) and prices (in the case of the other indices) and averaging them out can be misleading, if not irrelevant.