House price rise in January but longer-term picture less rosy

Why say "the longer-term picture isn’t looking so good"? Unless you own property purely as an investment, or want to take out a second mortgage (rarely advisable) a fall in prices from the current astronomical level would in fact be very good. We don't applaud price inflation in any other area of life, why's it considered desirable in housing?

The heterogenous nature of housing is such that a completely accurate calculation of price changes is not possible. I've heard the statisticians from Halifax say exactly that. The problem is that the media pick it up and try and make a story out of it. If the halifax reported 9.1% increase and the Nationwide a 9.8% increase we might assume that they were saying broadly the same thing. If however we take the same small difference and place it either side of zero eg one says a 0.4% fall and the other a 0.3% rise then we might conclude that they saying the opposite. Whereas what is really happening is that they are using a different set of house sales and hence getting a slightly different result. There is a degree of error and we must accept that and not read too much into this. What appears to be broadly happening is that prices are static which if inflation is running at 4 or 5% means that they are slowly getting cheaper - hurrah for that.

I'm finding it all a little confusing! Simon's article on 1 Feb said: [I]UK house prices fell by 0.2% in January, according to Nationwide’s latest House Price Index. However, they are 0.6% higher than they were in January 2011. The average UK house price is now £162,228.[/I] However today, apparently: [I]House prices rose by 0.6% in January, according to Halifax’s latest House Price Index, but the longer-term picture isn’t looking so good. Prices fell by 0.9% over the last three months of 2011 and are 1.8% lower than they were at this time last year. The average UK property price is £161,000....[/I] So the two building societies disagree, although Simon makes no mention of it, but the rise/fall is so small does it really signify? All that really matters is that two of my three children, along with many of their peers, have no hope of buying a house and little opportunity to save given the cost of renting and of commuting. It all adds up to a pretty dismal picture.