4most Enhanced House Price Index

09 December 2021

2 minute read

4most have developed an Enhanced House Price Index (EHPI) that allows for house prices trends to be monitored at three separate levels: from regional, down to a property’s postcode district level. This approach sets 4most apart from traditional HPIs offerings which are typically depicted at a regional level. The additional granularity provides a more accurate House Price Valuation along with a transparent methodology to allow the Lender to understand the mechanism of the Index.

The model, based on a paired sale regression approach, incorporates Land Registry data – the most comprehensive view of all completion data available. It has the capacity to value all properties within England and Wales, which is approximately 28 million properties.

To compare the accuracy of the 4most EHPI versus other readily available industry offerings.

Methodology:

Figure 1 – HPI Property Valuation Methodology

The exercise was completed whereby the previous house sale value was taken from the land registry data and each of the HPIs was then used to estimate the current value of the property in 2020/21. The results were then compared to those that were sold in 2020/21 – again using land registry data.

Results:

The charts below show the results of the analysis:

Figure 2 – HPI Property Valuation Comparisons

In terms of average valuations 4most valuations are the most accurate and within £200 of the average sale price in 2020/21.
The Error rate chart shows 4most has lower error overall for 2020/21 Sales.

The chart below also shows the average error rate by Region:

Figure 3 – Absolute Error Rate by Region

In terms of error rate 4most shows a consistent trend across all regions and in the majority of cases gives a more accurate valuation of the sold property.

For more information please contact info@4-most.co.uk