So how do house price surveys work, and which ones should you trust? The Land Registry, which records all completed property sales in England and Wales, has been recording the price of all property sales since April 2000, although the data now goes back to January 1995. Their monthly survey tracks the end of the buying process, when a transaction is registered. It uses something called Repeat Sales Regression to measure the change in prices over time. This means it only records the change in the price of properties that have been sold before, to ensure a proper comparison. Most sales are included, except for commercial properties and a small number of residential sales, such as those of council houses and council flats sold at a discount. Also, repossessions and property transfers following a divorce are excluded to avoid skewing the sample.

The proceeds of all the transactions are added up, and then divided by the total number of sales to reach an average sale price. As it takes virtually all residential property sales into account, the Land Registry’s figures can provide a unique insight down to postcode level. The only caveat is that the data is based on registered completions and, although most are registered within a week or two there is an allowance for registration up to three months after the event.

Next, the Government has its own monthly house price index, issued by the Department for Communities and Local Government (DCLG). This covers the whole of the UK and is based on data supplied by the Council of Mortgage Lenders. It is produced using a large sample (approximately 60%) of completed sales all of which have a mortgage attached, but cash sales are not included.

Unlike the Nationwide and Halifax surveys (see below) which are weighted according to transactions, the DCLG survey depends much more on the total amount of money spent. This means that London and the South East, where house prices are highest, will have a greater influence on the Government’s index.

Perhaps the best known reports on the property market are provided by two of the UK’s biggest mortgage lenders: Halifax and Nationwide. Both surveys cover the entire UK, but are based on a sample of each lender’s own loans each month. The prices measured are those agreed at the point when the mortgage is approved, not at the later point when the sale is completed. The two surveys use identical statistical methods, but because they use different samples the figures sometimes diverge in terms of both the monthly price changes and annual trends. Also, like the DCLG survey, they are based only on property sales financed by mortgage lending, ignoring sales which are transacted on a cash basis.

The Royal Institute of Chartered Surveyors (RICS) UK market survey reflects confidence in the property market rather than what is actually happening to house prices. About 250 estate agents in the UK who are members are asked if they feel prices in their own areas have been rising or falling in the preceding three months. Although this appears to be a rather narrow and subjective way of measuring property price changes, generally speaking the RICS survey is the first to show any major changes in the market.

Finally, Hometrack and Rightmove are two property industry businesses which also produce their own house price surveys. Started in 1999, Hometrack collects data from 3,500 estate agent offices from all 2,200 postcode districts in England and Wales. The estate agents report whether asking prices are rising or falling. They are asked to report the “achievable selling price” for each of four standard property types in their area. Rightmove’s survey operates in a completely different way, by collating asking prices for houses placed on its own website over the previous month. The firm says its website now displays 90% of all homes for sale in the UK although its monthly survey covers just England and Wales. However, although it might give an indication of how sellers and their agents are feeling about the market, it obviously does not reflect the prices at which properties actually sell.

Clearly, there is a lot of information, coming from different data samples, to understand and digest. Key to this is to recognise that much of the information is based on national averages. When buying a house it’s important to also understand all the local factors that influence asking price and conduct due diligence on the property to establish context. Remember, most homes are not a commodity and the true price of any given property is what the seller and buyer agree on the day.

The latest market report from Savills shows that prices across the UK’s prime markets fell by an average of 3.3% against an increase of 8.7% across all prime London and 14.1% in prime central London. Very few areas outside London ended 2011 in positive territory. Only locations such as Sunningdale, Weybridge and Henley saw price rises, in the region of 2%.

Savills says that this was supported in the latter stages of the year by international equity, and makes this niche area of the country, its very top end in particular, pretty much the only location currently able to perform in line with prime London.

In general, the South East lost around 2% of its value as the traditional fuel of these markets, City money, was largely reinvested in prime London. ‘It’s not that domestic owners have stopped trading up, but they are trading up within London and the flow of City money that would normally be the lifeblood of markets such as Guildford is staying put,’ said Lucian Cook, director of Savills residential research. ‘The result is that the country is now looking better value than for many years, a factor that we would normally expect to stimulate buying activity,’ he added.

Realistic pricing based on current market conditions is the key to stimulating these markets. Set against the backdrop of a potentially volatile economic recovery only the best houses will command competitive attention in spite of the lack of stock and low transaction levels. Finding and securing the right home will take careful investigation and the application of time and energy. Nevertheless the South East, and especially the perennially popular towns, should outperform the wider market over the course of the next five years given a lesser reliance on mortgage finance and the natural ripple effect of housing equity from the capital.

If you have been thinking of escaping the smoke, perhaps now is the time to cash in on the London market and move to the country.

One reads of the monthly Halifax and Nationwide House Price Indices; however these concern the price of a typically transacted house rather than the price of a typical house in the property stock of a specific area. They do not (and cannot) offer a subjective estimate of quality or importance to the individual in their specific circumstances. Unless comparing apartments in uniform modern blocks, each property offers its own subtle differences, adding to the obvious differences of streets, towns and regions. Each must be judged on its relative value to and by the values of the buyer.

When considering buying a new home the first and most important question must be: Why? Followed closely by: When? Once answered satisfactorily these will help answer the next important question: Where? Then one can move on to the final major question: What? Clearly there are layers of detail that fall under these headings and a good search agent will help their clients assess and qualify the answers, which may be adjusted as the search progresses.

But the important thing is to develop a clear personal strategy and then the vicissitudes of the wider market and economy can be put in to perspective and managed accordingly.

Although there are some individual examples of the best houses selling quickly in competitive sealed bids, the norm seems to be that buyers are being cautious and not just jumping on anything despite a shortage of good quality family homes.  Potential vendors, seeing the lack of choice, should be encouraged to launch their sale, but instead are worried about there being nothing for them to buy, and so they hesitate and add to the log-jamb.  This is all contributing to the low volume of transactions.

With all the pressures on personal finance and continuing concerns about the state of the national economy, it’s easy to understand why householders might choose to stay put.  There are good reasons to be cautious, but much of this is straightforward common sense for prudent buyers in any market.  However, where there is a need to move the only sensible option is to get on with it and, perhaps more now than in the past, seek professional help and advice to take away some of the worry and stress over making the best purchasing decision.

Unfortunately the UK property market has in the recent past become all about how much money one can make and, a bit like the financial sector, that has blinded people and commentators to the fundamentals.  A house (or flat) is a home first and foremost; there to provide shelter, security and comfort.  Now that Spring is well and truly here (a guarantee that it will now rain all summer) let’s hope buyers and sellers can get on with their normal lives.

Clearly I have a vested interest in maintaining the house buying public’s morale, and encouraging them to engage the services of a buyer’s agent (me) in particular.  Nevertheless, one message that has come through clearly from the majority of signed clients and enquiries this year is that people are looking for a home, not some financial instrument to make a fast buck.  Of course no-one wants to think that the market value of the home they’ve just bought will tumble in the coming months; but neither is it practical to wait for the market to be “just right” if it’s time to move.  I think the consensus of opinion is that house prices will fluctuate for the foreseeable future – swings and roundabouts!