Evanomics

House prices

• Evan Davis | Vital Statistics |
• 30 Jan 07, 11:23 AM

The Nationwide house price index is published today.

I don't encourage people to look too closely at it.

We get far too many monthly measures of house price inflation and we're already too pre-occupied by house price movements. I've had frequent arguments with colleagues who want the BBC to cover every set of house price figures we get and who tell me the audience like reading about house prices. I'm not convinced - in my view, we would be doing more of a public service to cover celebrity news, for which there is also a big audience demand.

The most interesting fact in the Nationwide press release is not the one that tells us this month's change in house prices, but the one that reiterates the long term trend over the last three decades. Guess what, the trend rise in house prices is 2.6% per year over inflation.

My guess is that most people would assume house prices grow more quickly than that. But with the economy growing at about 2.5% a year on average, it makes sense for house prices to more or less tag along at about the same rate.

You can see the Nationwide press release here.

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