How we compile our statistics

Quality assurance

Prior to producing the final data extracts, validation checks are carried out on the data, and the following actions are taken:

• Non-market value sales – these sales are identified and reviewed, where possible, so that they can be excluded from the extractions. We aim to only include true market value sales in the data to produce accurate house price statistics outputs. The following are examples where the sale may not be a true market value sale:
  • Registrations where the ‘consideration’ (amount paid) is less than the ‘value’ (market value of property as provided on the registration application form). These could be an indication that only a share of the property is being sold, for example one of the joint owners of a shared property buys out the share of the other owner.
  • Registrations where the ‘consideration’ is blank or contains words, such as ‘Implementation of Agreement’, ‘Implementation of Will’, or ‘Love, Favour and Affection’.
  • Historic Right to Buy sales of council houses to sitting tenants. Other residential sales by councils or housing associations are included if they are market value sales or if the full market value has been provided on the application form, for example in sales relating to shared ownership schemes.
• Sales of multiple properties – sales of multiple properties in one application are identified so that they can be excluded from the extractions, since we are unable to identify individual prices for each residential property in the sale. Multiple sales are often commercial transactions between companies or housing associations and may contain a mixture of residential and commercial properties. Only sales of single, residential properties are included in our analysis.
• Duplicates – duplicate lines of data are identified and removed to avoid the same sale information being captured more than once. Duplicate lines occur as part of our registration process where, for example, there is a dual registration affecting more than one registered title.
• Cancelled applications – applications which were subsequently cancelled are identified so that they can be excluded from the extractions.
• Extreme value considerations - All considerations under £30,000 and more than £750,000 are checked for accuracy.
• Foreign currency – considerations in foreign currency are identified and converted to £ sterling.
• Land use classification – the land class provided is compared with the address data with the aim of ensuring the classification of the residential property is correct. Only residential sales are included in the data extracts (although the Property Market report includes a section on non-residential transactions).

• Dates of entry – the date of entry is checked for obvious errors and dates of entry are added where they are missing.

Methodology

Average house price measure

Average prices are calculated using the median and the arithmetic mean. Typically, the arithmetic mean will lead to a higher average price than other measures. Due to the distribution of residential property prices, the arithmetic mean can be influenced by the sale of a few high value properties.  The median is the recommended measure to use in RoS statistics as it is less influenced by extreme values than the arithmetic mean and therefore provides a better indication of the "typical" house price.

House types

The house type is identified by using a house type classification system developed by RoS. The RoS methodology automatically classifies dwelling types according to the four pre-defined types using Ordnance Survey (OS) mapping and address products to assess counts of addresses and neighbouring building polygons (building shapes identified on the OS digital map base). This method of classification is detailed in the table below.

House type	Example	Method of classification
Detached		A building with no adjacent addressed building.
Semi-detached		A building with 1 adjacent singly addressed building.
Terraced House		A building with one or more singly addressed neighbours.
Multiple Occupancy		A building with one or more singly addressed neighbours.

The majority of house types can be assigned to one of the four house types by this method. Sales which cannot be identified using this method (approximately 15-30% of the monthly total) are initially categorised as Unassigned. The main reasons for unassigned sales are:

• Registration of the property is still underway. These are predominately New Build properties or very recent sales transactions without OS address points, and the house type will be identified when the property transfer has been fully registered by RoS.
• The methodology has indicated that the property is ‘unaddressed’. These are applications with a RoS title seedpoint (a point marker used to identify the position of a Land Register Title on the OS basemap) which falls within a building or area we have identified as 'unaddressable' e.g. garages, sheds, commercial units, buildings without OS address points or areas of ground. These applications need to be examined manually to determine the accuracy of the sales data and OS address point data.

Work is ongoing to review the sales with an unassigned house type that fall into the second category and manually assign a house type or reclassify the sale as non-residential. Data extracts from the Scottish Energy Performance Certificate (EPC) Register have been used to support and validate this process where possible. This work has mainly focused on 2003-04 to 2005-06 unassigned sales data to date. In addition, improvements have been made to our mapping processes and systems, further contributing to a reduction in unassigned sales.

We will continue to work on reducing the number of unassigned sales with a view to bringing the volume of unassigned sales per year across the whole of Scotland to below 1,000 sales (less than 1% of all sales in the year) for all but the most recent years in which there are applications still undergoing registration. It is not possible to completely eradicate all unassigned sales due to changes in property use, e.g. a house being demolished, or due to changes in the registered title that have taken place since the original sale, e.g. property being amalgamated into another property.

In relation to sales in the most recent years, the number of unassigned sales decreases over time as applications are completed and more information becomes available, and therefore a provisional label is applied to the latest statistics by house type.

Land use classification

Since December 2014, RoS records six land classes: residential, commercial, land, agriculture, forestry and other (prior to this the four land classes used were residential, commercial, land and other). The land class information is provided by the submitting agent on the RoS application form when an application for registration is submitted. Classification is made on the primary land use of the plot of land. Further information on the six land use classes can be found in the RoS application guidance.

As part of our quality assurance process outlined above, we reclassify properties where the land class is incorrect, for example commercial premises that have been classified as residential.

Cash and mortgage sales

RoS matches sales to a Standard Security (mortgage) against the same title. A cash sale is defined as a residential sale for which no mortgage application has been received either at the time the sale is registered or within the period of up to 100 days following the registration of the sale. For example, if an application for registration of a residential sale is received on 20 January and no application for registration of a mortgage security is received in January, February or March, then the sale is classed as a cash sale.

New builds

The majority of new build properties are sales of plots from a builder’s title. RoS can therefore identify sales from major builders’ titles and add a new build flag to them in the data. The builders’ titles are identified as part of our quality assurance processes. These are checked to confirm that sales from the titles are new builds and added to a builders’ list so that future sales out of the title are also marked as new build sales. The figures will include the majority of new build transactions undertaken but may not include sales related to very small developments or single new build properties by private or small-scale builders. They will not include new build properties which do not have an associated sale.

Geographies

Property sales are allocated to a geographic area, for example local authority or data zone, using the title seed point (a point marker used to identify the position of the land register title, or property, on the Ordnance Survey base map).

If a property does not have a seed point, then the postcode is used to assign a local authority and an Urban Rural Classification using the postcode look-up. For new build residential sales where a postcode may not yet be available, the postcode for the builders’ title is used. For all other geographies, it is recorded as unknown and excluded from the analysis.

If there is no seed point and the postcode does not match with the postcode look-up tables, postcode sector can also be used to assign an Urban Rural Classification. If there is no postcode available, the sales are excluded from the analysis.

Further steps are taken to ensure all property sales are allocated to a local authority, regardless of whether they have a postcode or not.