News that house prices rose by 1.6% in August from the Nationwide, but fell by 2.2% in the same month by Rightmove paints an interesting picture about the UK property market.
It seems confusing, until you think about it a bit more. Maybe both indicators are correct, but they are looking at different parts of the market cycle.
Rightmove pride themselves in capturing around 90% of all residential propetry sales in the UK. They certainly have a wide market viewpoint and are in an excellent to see the state of property marketing.
Nationwide is the UKs largest mortgage lender and certainly has an excellent viewpoint of the state of current lending. Or in other words, current property transactions.
Is it correct to think that Rightmove is ahead of Nationwide in the property market cycle? Houses have to be marketed before they are actually sold, so it seems that way.
So maybe, and this is just my view, Rightmove is providing an early indication that house prices have reached a temporary peak. Nationwide is seeing house sales agreed a couple of months ago and is therefore lagging the Rightmove indicator.
If my view is correct, then we might see figures from the Nationwide that show a decline in house prices in the next few months.