House prices rise £50,000 in a month. Really?

I see a lot of hyped-up financial figures everyday, some shocking, some ridiculous, but one in particular has caught my attention. Figures from property portal Rightmove showed the average London asking price leapt 10.2% in October to £565,863.That meant sellers in the capital were asking an astonishing £50,484 more for their property in a single month.

Inevitably, this fuelled fears that the London property bubble is now completely out of control, and ready to sweep across the country. That £50,000 figure made a great headline, and as a journalist, I dutifully did my best to hype it up in one of the publications I edit.

But I did so with a guilty twinge. Could London house prices really have risen more than £50,000 in a single month?I didn't believe it, but given the pressure of deadlines, I didn't have the time to look into properly.

Now somebody else has done the job for me. Property sales specialist the London Central Portfolio (LCP) has condemned Rightmove's research as "alarmist", and accused it of creating unfounded fears of a property bubble.It points out that the figure is based purely on asking prices, which distorts the true picture and produces "sensationalist reports".

That's because it is based on what people hope to get for their property, rather than the price they actually achieve. Asking price data can also can be skewed by just a handful of multi-million pound properties coming onto the market.

Land Registry data, which is based on the actual sale price achieved, showed prices in prime central London rising just 1.64% in the three months to September, and 7.52% over the year, LCP points out.

It says there is no reason to believe that prices in prime central London are currently rising faster than the long-term average of 9% a year. My suspicions were proved correct, and yet I don't feel too guilty about splashing that £50,000 headline. House prices in prime central London are nothing if not sensational, after all. The average sale price is a whopping £1,484,597.

I've just done a property search for cheap homes in Kensington and Chelsea, and found an "exceptionally large lock-up garage", on sale at the crazy price of £225,000. It doesn't look exceptionally large to me, just another ugly lock-up, with an insane price tag.With prices like these, who needs sensationalism?  So perhaps Rightmove is doing us a favour, by focusing attention on how mad things have become in the heart of London. Chancellor George Osborne is now reported to be considering calming things down by hitting foreign investors with a new tax charge.That would be bad news for London estate agents and other property companies.

No wonder they want to downplay that Rightmove data. As the old saying goes, 'there are lies, damned lies and statistics'. The UK property market is the perfect example of that.

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