House prices again

Back to GMTV which is like reading a tabloid at times and they're still talking about house prices falling. Oh do they like their percentages, because obviously people still don't get it. According to the pretty swoosh graphics. House prices went up in the first quarter by 7% then down in the second by 2.3%; oh noes the sky is falling.

Let's say that before the rise you're house was up for sale for £100 (I know just go with it) an increase of 7% means at the end of the first quarter you could get £107, but then it falls by 2.3% all the way down to £104.54 which is still greater than the start of the year. Even if you take the latest figures that prices have dropped by another 1.7% that's still £102.76 which is still higher than the beginning of the year.

GMTV had someone on to talk about this, and amazingly he made sense. He said (as people do every year) that house prices tend to fall during the summer. So why the 'catastrophic' drop? Well people saw the house price rise in the first quarter and thought oo I'll put my house up for sale at just the point in the year that people aren't interested in buying.


So at a time when there aren't many buyers about there was suddenly a lot more houses on the market. Doesn't take a genius to work out what happens then, yet still this gets reported.