04-08-08, UpMyStreet ©

At the time of going to press, the change in house prices for the last year was being pitched anywhere between an 8.1% drop (Nationwide) and a 6.9% rise (Prime Location) - depending on which house price index you look at. Even more confusingly, the National Housing Federation has said it expects prices to rise 25% by 2013.

The house price statistics we see in the press come from a number of different house price indices - each with their own methodology for calculating market changes. Which one is right? Whether you're buying, selling or staying put, use our guide to demystify the rise and fall of the house price (depending on whose numbers you're looking at).

Halifax/Nationwide

The methodology: The Halifax and Nationwide indices are two of the most widely quoted in the press. For both indices, figures are based on a monthly sample of mortgage applications. From these purchases a standardised house price is reached, and seasonal factors are applied. 

The downside: Only tracking homes bought with a mortgage ignores a significant chunk of the market - properties bought with cash. Many of these are in the super prime market (properties over £10m) which is currently the only sector resisting the downturn (source: Frank Knight Estate Agents). Nationwide claim their data is more accurate than the Halifax due to updates made after the 1991 census.

Land Registry

The methodology: The Land Registry arguably has the easiest job in tracking the property market as it has evidence almost all sales made. It then averages all sale prices and compares them with the previous month. It also uses the Repeat Sales Regression method to ensure properties are compared like-for-like.

The downside:  While the Land Registry has the largest sample size, and covers nearly all sales in the UK, its data lags behind other indices as it takes time to compile. Also, not even the Land Registry can record every sale made.

Rightmove

The methodology:  Rightmove has access to 90% of all homes for sale via estate agents in the UK. Their figures come from the monthly fluctuation in asking prices. By tracking asking prices, Rightmove aims to catch the mood of the market, and their index typically leads the trend of the Halifax index by about three months.

The downside: Tracking asking prices may reflect the mood of sellers, but it also allows for inflation from owners and agents overvaluing properties.

Prime Location

The methodology: Prime Location is a property engine that specialises in advertising properties at the higher end of the price scale. Its index is based on sale prices for prime properties.

The downside: The index is the most healthy-looking of all those listed because it is heavily biased toward the prime market, which is faring comparatively well.

Hometrack

The methodology: Hometrack surveys estate agents in every postcode, asking a series of questions about the prices and saleability of different home types in that area.

The downside: Hometrack is a relative newcomer (launched in 2000) and doesn't seasonally adjust its figures. Also, prices may change between estate agents completing the questionnaire and the homes being put on the market, due to valuations and surveys.