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House buying - a good idea or not?

Extracts from this document...

Introduction

Application of number: level 3

House Buying – a Good Idea or Not?

Task 1

a) Firstly the intention is to collect data for house prices within the area of Leicester. In order to produce reliable samples of data, information would need to be collected for at least 60 houses in total. Two separate samples, each comprising of 30 houses will be acquired for:        a) First time buyers’ houses

                        b) Other houses

The information will be obtained form two main sources:

  1. Local newspaper
  2. Internet

Undeniably both sources should provide sufficient house prices from many of the leading estate agents.

The data collated for both samples would be presented in the form of suitable graphs and charts and will then be used to calculate the mean, median, and interquartile range. House prices for first time buyers’ houses and other houses will also be compiled at a later stage. These house prices will be compared with present house prices by calculating the percentage increase since 1998. The current Leicestershire house prices will also be compared with regional and UK house prices.

b) The property guide published by the Leicester Mercury local newspaper was undeniably an invaluable source of house price data for my area.

...read more.

Middle

= £81,984 (to the nearest £)

  • Range:        highest house price – lowest house price

= £249,950 – £18,500

= £231,450 (to the nearest £)

All of the calculations have been double checked in order to ensure that they are correct. The data in the tables of the samples was arranged in ascending order in order to be able to easily recognise the highest and lowest values required for calculating the range. The calculations for the means are seemingly correct since they are similar to mean values provided by the Internet. It can be quite simply proved that the mean for all houses is correct as:

   [First-time buyers’ houses’ mean + Other houses’ mean ] / 2 = All houses’ mean

All of the means are also values, which are almost in the middle between the largest and the lowest values of each sample.

  1. Cumulative frequency graphs will be produced to find the medians, the middle

values of distribution, and interquartile ranges, measures of spread, for the data collected.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

...read more.

Conclusion

Accuracy of the graphs and charts were ensured by carrying out the following:

  • Using tick marks with lower intervals
  • Adding values above bars (on Excel software) and ensuring that they correspond to the data in each of the sample tables.

Task 5

According to the data for all houses the average house price in my survey (i.e. £81,984) is lower than the average house price for my region (i.e. £88,700). Evidently this difference is not very considerable.

The difference could be due to the following:

  • Lack of demand as Leicester may have less to offer as a city (e.g. employment, education, leisure and recreation, low crime rates etc.)
  • Inaccuracies in selecting the house prices for the sample, which may be caused by not including enough data or ineffective selective sampling (due to data being selected too randomly).

However the average house price (for all houses) in my survey generally tends

be similar to that of the UK (£81,800).

Generally I think that buying a house in my local area would be a good investment due to the following reasons:

  • Average Leicester house prices being only relatively slightly above the national average.
  • Leicester house prices having the tendency to increase relatively considerably by about 26% within 2 years.

...read more.

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