Forecasting the future – but how accurate have past predictions been for property market?

Property forecasts and indices are a regular feature of EYE’s inbox with all sorts of firms keen to predict the future of the market.

But just how accurate are their crystal balls?

Conveyancing comparison website reallymoving.com began releasing forecasts for house price growth in June based on the 90,000 or so requests for quotes it receives over a three month period.

Its first report forecast a 6% annual drop in values during May followed by 1% growth in June, 0% in July and a 1% fall in August.

This was revised in July to 2.3% annual growth in June, 0.7% annual growth in July and 1.2% in August.

The Land Registry released its latest House Price Index this week, which gives an indication of how accurate these predictions have been.

The forecasters were way off when it came to May, with average values increasing by 1.2% annually rather than the 6% drop that was predicted.

However, the data has been closer in more recent months.

Land Registry figures show annual growth was 1.1% in June, 0.8% in July  and 1.3% in August.

Reallymoving’s latest forecasts are more ambitious, predicting an increase of 4.2% in October and November – the highest level seen since October 2017 – followed by 3.4% in December.

Another common source of crystal ball gazing is the mortgage market.

Surveying firm e.surv has released its latest forecasts on mortgage approvals, predicting that there were 65,997 during September 2019.

The surveyor claims small deposit borrowers increased their market share  from 28.3% to 28.7% last month, with the proportion of mortgages approved for large deposit applicants also increasing from 27.7% to 27.9%.

Lending data has not yet been released for September but figures from previous months suggest e.surv has been very close in its estimates.

It forecast 66,059 mortgage approvals for house purchase in August, while the Bank of England later said there had been 65,545.

In July e.surv predicted 65,770, just behind the 67,011 revealed by the Bank of England.

Its estimates were slightly overstated in June, at 66,435 compared with the Bank’s figures of 66,319.

In May e.surv predicted 65,801 approvals compared with 65,570 revealed by the Bank.

Both datasets are seasonally adjusted.

Will predictions for September and the subsequent months turn out to be correct?

Only time, and EYE analysis, will tell.

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2 Comments

  1. AndSotheStoryBegan

    Extrapolate those by Quirk and the figures improve dramatically.

    Report
  2. Woodentop

    Not much hope for companies that have fees that rely on market taking off, to survive!

    Report
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