It’s no secret that property is high on the political and social agenda in the UK with a myriad of property market data and analysis fed to the media and consumers daily. Yet, when there are sometimes conflicting views from different sources reporting on the same subject, how do we know which one to believe? Sandra Jones, one of our directors reflects on the conundrum.
IPD launched its latest Residential Property Index at the beginning of March, announcing that total returns on residential investments were 7.1% in 2015. LSL published its Buy to Let index around the same time and announced that total returns for residential investments in 2015 had been 12%. Neither is wrong necessarily. In fact, they are almost certainly both right - but for different reasons - and it highlights the difficulty of reporting on such an immature investment sector. The two indices are measuring very different baskets of properties.
IPD has pooled the details from 16 large residential portfolios with a combined value of £3.8 billion, holding properties that are predominantly, though not exclusively, located in London and the South East. LSL has based its analysis on 20,000 properties across England and Wales and notes that ‘these figures are subject to revision as more data becomes available’.
IPD put out a call for more portfolios and, assuming the industry responds, its databank will grow and become more representative of at least one part of the sector. Both these commentators are old hands at analysing data but in the era of big data and infographics, it is all too easy to publish statistics that seem to be authoritative and acquire more gravitas as they are tweeted and re-tweeted, mapped, charted, dropped into powerpoint and picked up by content-hungry media.
Hilary Osborne, writing in The Guardian, drew attention to a similarly confusing duo. “The latest reports from two of the UK’s biggest mortgage lenders show house prices going in opposite directions in February”. Nationwide building society had reported an average house price rise of 0.3% in February to £196,930, while Halifax said there had been a 1.4% fall over the month, to £209,495. Both base their statistics on mortgages approved in that month and both make allowances for variations in the type and location of properties in any one month and again, both are almost certainly right for different reasons – but they come out with very different statistics.
It’s why big data is both a blessing and a curse. The capacity to manage and crunch enormous data sets creates incredible opportunities for new insights in property - as it does in medicine, education, resource management, or running a city - but the daily bombardment of new and often contradictory statistics, can be utterly bewildering.
At Dataloft, we have made it our mission to strip away the mystique from complex data analysis and to add value for our clients through our interpretation and insights. We feel strongly that presentation must be digestible and well designed. As a company we have invested time and resource into designing research publications and building software products, which are visually appealing, unambiguous and clear.
If you’d like to learn more about how we work, please explore our website or contact us on hello@dataloft.co.uk