HOUSE BUILDERS are drawing up their own house price inflation index in a bid to persuade the Bank of England's monetary policy committee to keep interest rates on hold.
The House Builders Federation wants to produce its own figures because its members believe other indexes produced by mortgage lenders are inaccurate.
In its latest trading update, house builder Persimmon said the average increase in its selling prices was well below those reported for all housing transactions published in surveys produced by the Halifax and Nationwide building societies.
House Builders Federation spokesman Pierre Williams said: 'We want to back up our industry's view with hard data. House builders think that the percentage rises in house prices on the majority of indexes are inflated.'
Growing speculation that there will be another quarter point rise in August has triggered the HBF to look into setting up its own prototype index.
But how the index will measure changes in house prices has yet to be worked out.
Mr Williams said: 'The methodology of measuring the market depends on a huge number of variables and the market is very regionalised at the moment.
'However, a number of the major house builders have made it clear that inflation is more moderate than the main indexes indicate.'
Fears that the Bank of England could overdo interest rate rises is behind the plans.
Mr Williams said: 'Setting interest rate policy is a balancing act and they have implemented small rises in order to calm the market.We believe it has done its job.'
The HBF said the index might not be ready before the monetary policy committee meets next month.
A decision has yet to be made on whether the index will be produced in the long term.