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www.communities.gov.uk

Statistical Release: House Price Index - January 2008

Published 11 March 2008

Download this release as a PDF: House Price Index - January 2008 (PDF, 96 kb, 9 pages)

  • The mix-adjusted average house price in the UK in January 2008 stood at £221,758, up from £218,007 in December 2007 (not seasonally adjusted).
  • UK annual house price inflation in January 2008 was 8.0 per cent, down from 8.4 per cent in December 2007. Annual house price inflation in London was 13.8 per cent in January, up from 12.2 per cent in December.
  • For the quarter ending January 2008 UK house prices increased by 0.7 per cent. This compares with a price increase of 0.9 per cent for the three months ending October 2007.

Figure 1: UK annual house price inflation (all dwellings)

Graph showing UK annual house price inflation (all dwellings)

   UK  London  UK
   All dwellings  All dwellings  All dwellings
 Not seasonally adjusted  Index
Feb 02 = 100
% change
over 12
months 
 Index
Feb 02 = 100
 % change
over 12
months
 £
   
2007 Aug  183.7  11.3  168.9  17.2  219,369
Sep  184.3  10.8  170.6  16.5  220,111
Oct  184.4  11.3  171.0  17.6  220,291
Nov(R)  183.2  9.8  168.2  14.7  218,865
Dec(R)  182.5  8.4  167.8  12.2  218,007
           
2008 Jan  185.7  8.0  175.0  13.8  221,758
(R) = Revised

House Price Inflation: Regional

The UK house price inflation rate fell from 8.4 per cent in December 2007 to 8.0 per cent in January 2008. The figures for December and November have been revised following receipt of new data. Between December and January there was a rise of 1.7 per cent in the prices index of properties bought compared with a larger rise of 2.1 per cent over the same period last year resulting in a decrease in the annual inflation rate.

Figure 2: House price inflation by country
12-month percentage change

Graph showing house price inflation by country (12-month percentage change)

The rise in UK prices between December and January can be attributed to increases in average prices for detached houses (4.3 per cent), flats (1.3 per cent), bungalows (1.1 per cent), semi-detached houses (0.9 per cent) and terraced houses (0.5 per cent).

England, Scotland and Northern Ireland saw decreases in house price inflation in January 2008. In England annual house price inflation fell from 8.1 per cent in December to 7.9 per cent in January; In Scotland annual house price inflation fell from 11.1 per cent in December to 9.8 per cent in January; In Northern Ireland annual house price inflation fell from 12.6 per cent in December to 8.4 per cent in January. Wales, though, saw an increase in house price inflation from 5.9 per cent in December to 7.4 per cent in January.

House price inflation fell in six of the English regions and rose in the other three regions.

Figure 3: Regional house price indices
12-month percentage change for the latest month

Graph showing regional house price indices (12-month percentage change for the latest month)

The highest inflation rate was in London (13.8 percent) followed by the South East (8.8 per cent), and the East (6.7 per cent). Inflation rates were lower in the South West (6.3 per cent), North East (5.7 per cent) and Yorkshire and the Humber (5.5 per cent). The lowest inflation rates were in the East Midlands (5.4 per cent), the North West (4.8 per cent) and the West Midlands (3.2 per cent).

House Prices: Regional

Mix-adjusted average house prices in January were £229,891 in England, £171,830 in Wales, £164,750 in Scotland and £222,595 in Northern Ireland.

Figure 4: Mix-adjusted average house prices
Not seasonally adjusted

Graph showing mix-adjusted average house prices (Not seasonally adjusted)

The English region with the highest average house price in January remains London at £351,096. The lowest average price was in the North East at £151,810.

Of the English regions, only the East, London, South East and the South West had average prices above the UK average.

House Price Inflation: Type of Buyer

The UK house price inflation rate for first time buyers fell from 9.3 per cent in December to 7.6 per cent in January. There was a rise of 0.5 per cent in the prices index between December and January in the properties bought by first time buyers.

Figure 5: UK annual house price inflation by type of buyer
12-month percentage change

Graph showing UK annual house price inflation by type of buyer (12-month percentage change)

The inflation rate for former owner occupiers rose from 8.1 per cent in December to 8.2 per cent in January. There was a rise of 2.1 per cent in the prices index between December and January in the properties bought by former owner occupiers.

The average price paid by first time buyers across the whole of the UK was £167,193 in January, while the average price paid by former owner occupiers was £248,527.

Tables

Tables are from July 2005 to January 2008.

Additional tables and earlier monthly data can be accessed in the 'Live tables' section (housing market and house prices) at www.communities.gov.uk/housingstatistics.

Notes to editors

1. The mix-adjusted house price series are produced by Communities and Local Government and are being published on an experimental basis. Development of the methodology underpinning the indices has been undertaken in conjunction with the Office for National Statistics. In light of the recent Statistics and Registration Service Act 2007 we will seek advice from the new Statistics Board, at the most appropriate time, to gain accreditation for the index as a 'National Statistic'.

2. Since September 2005 the new mix-adjusted house price index is based on an enlarged sample of completions data (about 50,000 per month) from about 60 mortgage lenders who supply data through the Regulated Mortgage Survey (RMS) of the Council of Mortgage Lenders (CML)/BankSearch. Prior to this date the index was based on the Survey of MortgageLenders (SML) (about 25,000 completions per month). The number of cases received will also be affected by the total number of mortgages that have been completed.

3. In January of each year the index weights are revised to reflect the pattern of property transactions during the previous 3 years. The mix-adjusted average prices for the rest of the year are then determined using these new weights. Consequently whilst house prices within the year are comparable - they are all based on the same weights - house prices between years cannot be compared because last year's weights and this year's weights are different. The index itself is constructed on a chain-linked basis, which enables year-on-year comparisons to be made. This means that the year-on-year change in the index for November, say, is effectively the change in the average price from November 2006 to December 2006 (using the weights for 2006) combined with the change in the average price from January 2007 to November 2007 using the weights for 2007. Therefore, the year-on-year change in the index is not the same as the year-on-year change inthe mix-adjusted average price. The prices for January 2008 published in this Statistical Release use the weights for 2007 to enable a proper comparison with the prices for December 2007. Prices for January on 2008 weights will be published along with the prices for February on 15 April.

4. The Communities and Local Government index is currently showing similar year-on-year inflation to other indices available from commercial sources. The slight difference will be affected by differences in weighting. The Communities and Local Government index uses expenditure weights, whereas other indices use transaction weights. Consequently, the Communities and Local Government index is influenced by house price inflation rates in the higher priced areas (which are currently in the South) where house prices - and therefore total expenditure on house buying - is highest. Similarly, regional inflation determined by the Communities and Local Government is more influenced by the market for the higher priced properties (ie the demand for detached houses).

5. Note that the Communities and Local Government house price index figures released in this issue are based on completions during the month of January. Other recent indicators have been based on asking prices in January or prices based on mortgages approved during January. Therefore the Communities and Local Government figures are not directly comparable with these other indicators.

6. A month on month comparison of the Communities and Local Government index and price is not advised, as the series are not seasonally adjusted and comparisons over periods of less than a year could be affected by seasonal fluctuations. The series will not be seasonally adjusted until a sufficiently long monthly series exists to explore whether seasonal adjustment is necessary.

7. Further details on the methodology of the index can be found in the Publications section of Housing Statistics website, at www.communities.gov.uk/housingstatistics.

8. Further quarterly and annual house price data can be found on the Communities and Local Government web site in Live tables - Housing Market section, tables 507 and 508 and tables 590 to 594.

9. The next three release dates are:

  • Tuesday 15 April 2008
  • Tuesday 13 May 2008
  • Tuesday 10 June 2008.

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