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Housing

House Price Index - August 2007

Published 15 October 2007

Download this release as a PDF: House Price Index - August 2007 (PDF, 125Kb, 9 pages)

  • The mix-adjusted average house price in the UK in August 2007 stood at £219,528, up from £218,479 in July 2007 (not seasonally adjusted).
  • UK annual house price inflation in August 2007 was 11.4 per cent, down from 12.4 per cent in July 2007. Annual house price inflation in London was 17.4 per cent in August, down from 19.1 per cent in July.
  • The UK annual house price inflation rate for the 3 months to August was 12.0 per cent and 18.0 per cent in London.

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

Figure 1: 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
£

 

 

March 173.2 10.9 157.6 13.9 206,890
April 175.0 11.1 159.0 13.6 209,010
May 176.5 10.8 161.2 14.3 210,793
June 179.4 12.1 165.4 17.5 214,222
 July  182.9 12.4 171.5  19.1

218,479

 August

 183.8

 11.4

 169.2

 17.4

219,528



House Price Inflation: Regional

The UK house price inflation rate fell from 12.4 per cent in July 2007 to 11.4 per cent in August 2007. Between July and August there was a rise of 0.5 per cent in the prices index of properties bought compared with a bigger rise of 1.4 per cent over the same period last year resulting in a decrease in the inflation rate.

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

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

The rise in UK prices between July and August can be attributed to increases in average prices for detached houses (1.7 per cent), semi-detached houses, (0.5 per cent), terraced houses (0.2 per cent) and bungalows (0.1 per cent). It is partly offset by a fall in the price of flats (0.9 per cent).

England, Scotland and Northern Ireland saw decreases in house price inflation in August 2007. In England annual house price inflation fell from 11.5 per cent in July to 10.6 per cent in August; In Scotland house price inflation fell from 16.4 per cent in July to 13.2 per cent in August; In Northern Ireland house price inflation fell from 46.8 per cent in July to 44.0 per cent in August. In Wales house price inflation increased from 7.6 per cent in July to 7.9 per cent in August.

House price inflation rose in one of the English regions, fell in seven regions and stayed the same in one region.

The highest inflation rate was in London (17.4 percent) followed by South East (10.9 per cent), and the South West (9.9 per cent). Inflation rates were lower in the East (9.6 per cent), East Midlands and the North West (7.4 per cent each). The lowest inflation rates were in the Yorkshire and the Humber (7.3 per cent), the North East (6.9 per cent) and the West Midlands (6.2 per cent).

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

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

House prices: regional

Mix-adjusted average house prices in August were £226,902 in England, £168,298 in Wales, £164,123 in Scotland and £246,785 in Northern Ireland.

The English region with the highest average house price in August remains London at £339,569. The lowest average price was in the North East at £151,007.

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

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

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

House price inflation: type of buyer

The UK house price inflation rate for first time buyers fell from 13.2 per cent in July to 11.9 per cent in August. There was a fall of 0.1 per cent in the prices index between July and August in the properties bought by first time buyers compared with a rise of 1.0 per cent over the same period last year.

The inflation rate for former owner occupiers fell from 12.1 per cent in July to 11.2 per cent in August. There was a rise of 0.7 per cent in the prices index between July and August in the properties bought by former owner occupiers, compared with a bigger rise of 1.5 per cent over the same period last year.

The average price paid by first time buyers across the whole of the UK was £167,070 in August, while the average price paid by former owner occupiers was £245,263.

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

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

Tables

Tables are from February 2005 to August 2007.

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 (over 50,000 per month) from about 50 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 Mortgage Lenders (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 August, say, is effectively the change in the average price from August 2006 to January 2007 (using the weights for 2006) combined with the change in the average price from January 2007 to August 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 in the mix-adjusted average price.

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 (i.e. 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 August. Other recent indicators have been based on asking prices in September or prices based on mortgages approved during September. 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 will be affected by seasonal fluctuations. The series will not be seasonally adjusted until a sufficiently long monthly series exists.

7. Further details on the methodology of the index can be found in the Publications section of Housing Statistics web pages, 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:

  • Monday 12 November 2007
  • Monday 10 December 2007
  • Monday 14 January 2008

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