Nationwide is changing the methodology used to compile its house price index from next month, with more reliance being placed on data submitted by mortgage applicants.
This is due to Nationwide no longer conducting physical valuations of some properties for which it is considering offering mortgage loans.
The small print of its latest house price index, released last week, details the change: “We will continue to follow the same type of statistical approach (known as ‘hedonic regression’) to calculate house prices.
“However, as a result of planned changes to our mortgage application process we may no longer commission physical mortgage valuation reports for all cases and so in future will source more information from customer application data.
“As we may not have complete or consistent information for a number of property attributes (floor area, type of garage and number of bathrooms), these variables will no longer be used in the index.”1
The new methodology will still respect the old house price indices produced by Nationwide, although the index says that there will be some joining factors – small changes in data – which will be conducted to allow historical comparisons.
In the future, Nationwide will still produce monthly UK house price data and a regional breakdown every quarter. The data will include a broad analysis of prices across all properties and prices relating to two types of mover: first time buyers and owner-occupiers.
Nationwide will also publish quarterly figures based on different property types, and on new and existing homes.