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Statistical bulletin: House Price Index, January 2015

Released: 24 March 2015 Download PDF

Key Findings

  • UK house prices increased by 8.4% in the year to January 2015, down from 9.8% in the year to December 2014.
  • House price annual inflation was 8.5% in England, 4.9% in Wales, 7.8% in Scotland and 7.3% in Northern Ireland.
  • Annual house price growth is beginning to show signs of slowing across the majority of the UK.
  • Annual house price increases in England were driven by an annual increase in London of 13.0% and to a lesser extent increases in the East (9.9%) and the South East (7.6%).
  • Excluding London and the South East, UK house prices increased by 6.5% in the 12 months to January 2015.
  • On a seasonally adjusted basis, average house prices fell by 0.2% between December 2014 and January 2015.
  • In January 2015, prices paid by first-time buyers were 9.7% higher on average than in January 2014. For owner-occupiers (existing owners), prices increased by 7.8% for the same period.

About This Statistical Bulletin

The Office for National Statistics (ONS) House Price Index (HPI), previously published by the Department for Communities and Local Government (DCLG), is a monthly release that publishes figures for mix-adjusted average house prices and house price indices for the UK, its component countries and regions.

The index is calculated using mortgage financed transactions that are collected via the Regulated Mortgage Survey by the Council of Mortgage Lenders. These cover the majority of mortgage lenders in the UK. The HPI complements other measures of inflation published by ONS such as the Consumer Price Indices, the Producer Price Indices and the Services Producer Price Indices.

This statistical bulletin provides comprehensive information on the change in house prices on a monthly and annual basis. It also includes analysis by country, region, type of buyer (first-time buyers and former owner-occupiers) and type of dwelling (new dwelling or pre-owned dwelling). Historical series for all accompanying tables that transferred from DCLG are also available in the data section of this release.

The figures published in this release are not seasonally adjusted unless otherwise stated.

House Price Index UK Summary

UK average house prices increased by 8.4% over the year to January 2015, down from an increase of 9.8% in the year to December 2014. This follows the house price increases the UK has experienced since April 2012 (Figure 1) and is driven in large part by increases in London. The average UK mix-adjusted house price in January 2015 was £273,000.

Figure 1: Annual house price rates of change, UK all dwellings from January 2004 to January 2015

12 month percentage change

Figure 1: Annual house price rates of change, UK all dwellings from January 2004 to January 2015
Source: Office for National Statistics

Notes:

  1. Not seasonally adjusted.
  2. Data collected via the Regulated Mortgage Survey.

Download chart

In January 2015, the UK mix-adjusted House Price Index reached 207.4 (Figure 2). This is 0.1% lower than the record level witnessed in August 2014, when the index reached 207.7 but 11.8% higher than the pre-economic downturn peak of 185.5 in January 2008.

Figure 2: Index values, UK all dwellings from January 2004 to January 2015

Index values February 2002=100

Figure 2: Index values, UK all dwellings from January 2004 to January 2015
Source: Office for National Statistics

Notes:

  1. Not seasonally adjusted.
  2. Data collected via the Regulated Mortgage Survey.

Download chart

On a seasonally adjusted basis, average house prices fell by 0.2% between December 2014 and January 2015, compared to an increase of 1.0% in average prices during the same period a year earlier.

Table A: House Price Index - Summary of UK all dwellings, January 2015

Index - February 2002=100

House Price Index: UK All Dwellings
Index % 12 month change Index   % monthly change   £
      NSA NSA SA   SA   NSA
2013 Jan 179.2 2.1 178.8 -0.6 237,000
Feb 176.1 1.9 178.6 -0.1 233,000
Mar 177.3 2.7 179.8 0.6 235,000
Apr 179.7 2.6 180.2 0.2 238,000
May 180.2 2.9 180.9 0.4 239,000
Jun 182.5 3.1 181.8 0.5 242,000
Jul 185.0 3.3 182.1 0.2 245,000
Aug 185.9 3.7 183.1 0.5 246,000
Sep 185.0 3.8 183.7 0.3 245,000
Oct 186.4 5.5 186.6 1.7 247,000
Nov 187.2 5.4 187.7 0.6 248,000
Dec 188.5 5.5 189.6 0.9   250,000
2014 Jan 191.3 6.8 191.1 R 1.0 R 252,000
Feb 192.2 9.2 194.9 R 2.0 253,000
Mar 191.4 8.0 194.0 R -0.5 252,000
Apr 197.5 9.9 197.9 R 2.0 260,000
May 198.9 10.4 199.6 0.8 262,000
Jun 201.2 10.2 200.5 0.5 265,000
Jul 206.2 11.5 203.3 1.4 272,000
Aug 207.7 11.7 204.8 R 0.7 274,000
Sep 207.3 12.1 205.9 0.5 273,000
Oct 205.8 10.4 206.1 0.1 271,000
Nov 205.7 9.9 206.3 R 0.1 R 271,000
Dec 206.9 9.8 207.7 R 0.7 R 272,000
2015 Jan   207.4 8.4 207.3   -0.2   273,000

Table source: Office for National Statistics

Table notes:

  1. Average house prices are not comparable between years as they reflect a different mix of houses being transacted. Indices have been chain linked so they are comparable year-on-year. For more information please see the re-weighting section in the background notes.

  2. SA = Seasonally adjusted.

  3. NSA = Not seasonally adjusted.

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House Price Index by Country

During the year to January 2015, average house prices increased 8.5% in England, 4.9% in Wales, 7.8% in Scotland and 7.3% in Northern Ireland (Figure 3).

Figure 3: All dwellings annual house price rates of change by country, January 2004 to January 2015

12 month percentage change

Figure 3: All dwellings annual house price rates of change by country, January 2004 to January 2015
Source: Office for National Statistics

Notes:

  1. Not seasonally adjusted.
  2. Data collected via the Regulated Mortgage Survey.
  3. Please click on the image to view a larger version.

Download chart

In January 2015, Wales remains the only country with house prices at record levels (Figure 4).

The index for Wales reached a record level of 223.7. This is up 0.5% from last month's record level (222.7). The England index reached 204.9 in January 2015. This is up slightly from December 2014 but 0.2% below the record level of 205.3 in August 2014. However, house prices in England are 13.3% higher than the pre-economic downturn peak in January 2008 of 180.8. The index for Northern Ireland (153.9) in January 2015 is 45.3% below the peak of August 2007 (281.5). The index for Scotland (232.8) in January 2015 is 0.9% below the record level witnessed in August 2014 (234.9). Scotland prices are 1.0% higher than the pre-economic downturn peak of June 2008 (230.6).

Figure 4: Mix-adjusted House Price Index by UK countries from January 2004 to January 2015

Index level (Feb 2002=100)

Figure 4: Mix-adjusted House Price Index by UK countries from January 2004 to January 2015
Source: Office for National Statistics

Notes:

  1. Not seasonally adjusted.
  2. Data collected via the Regulated Mortgage Survey.
  3. Please click on the image to view a larger version.

Download chart

House Price Index by Region

Annual house price growth is beginning to show signs of slowing in the majority of the nine English regions (Figure 5). The largest increase was again in London at 13.0% followed by the East (9.9%) and the South East (7.6%). The lowest growth in January 2015 was in Yorkshire and the Humber, where prices increased by 3.6% over the year. Excluding London and the South East, UK house prices increased by 6.5% over the year to January 2015.

Figure 5: All dwellings annual house price rates of change: UK, country and regions

12 month percentage change for January 2015

Figure 5: All dwellings annual house price rates of change: UK, country and regions
Source: Office for National Statistics

Notes:

  1. Not seasonally adjusted.
  2. Data collected via the Regulated Mortgage Survey.

Download chart

House prices are no longer at record levels in any region of England in January 2015. House prices have fallen back slightly from December 2014 record levels in the West Midlands, the East, the South East and the South West.

The price index for the West Midlands fell by 1.3% from the record level of 189.7 in December 2014 to reach 187.2 in January 2015 (Figure 6). The East of England index fell by 0.1% from the record level of 190.3 in December 2014 to reach 190.2 in January 2015. The South East index fell by 0.5% from the record level of 189.2 in December 2014 to reach 188.3 in January 2015. Finally the South West index fell by 0.1% from the record level of 188.1 in December 2014 to reach 187.9 in January 2015.

The price index for London is now 0.7% below the record level of 243.5 in August 2014 with an index of 241.9 in January 2015. However, the London index is 38.6% higher than the pre-economic downturn peak in January 2008 (174.5).

Figure 6: Mix-adjusted House Price Index by selected regions from January 2004 to January 2015

Index level (Feb 2002=100)

Figure 6: Mix-adjusted House Price Index by selected regions from January 2004 to January 2015
Source: Office for National Statistics

Notes:

  1. Not seasonally adjusted.
  2. Data collected via the Regulated Mortgage Survey.
  3. Please click on the image to view a larger version.

Download chart

Average House Prices in Countries and Regions

Average mix-adjusted house prices in January 2015 stood at £285,000 in England, £174,000 in Wales, £142,000 in Northern Ireland and £198,000 in Scotland (Figure 7).

In January 2015, London continued to be the English region with the highest average house price at £510,000 and the North East had the lowest average house price at £155,000. London, the South East and the East all had prices higher than the UK average price of £273,000.

Excluding London and the South East, the average UK mix-adjusted house price was £208,000.

Figure 7: Mix-adjusted average house price: UK, country and region

House Prices for January 2015

Figure 7: Mix-adjusted average house price: UK, country and region
Source: Office for National Statistics

Notes:

  1. Not seasonally adjusted.
  2. Data collected via the Regulated Mortgage Survey.

Download chart

House Price Index by Type of Buyer

The average price for properties bought by first-time buyers increased by 9.7% over the year to January 2015, up from an increase of 9.5% in December 2014 (Figure 8). In January 2015 the average price paid for a house by a first-time buyer was £210,000.

The average price for properties bought by former owner-occupiers (existing owners) increased by 7.8% in the year to January 2015, down from an increase of 9.8% in December 2014. In January 2015, the average price paid for a house by a former owner-occupier was £314,000.

Figure 8: UK annual house price rates of change by type of buyer, January 2004 to January 2015

12 month percentage change

Figure 8: UK annual house price rates of change by type of buyer, January 2004 to January 2015
Source: Office for National Statistics

Notes:

  1. Not seasonally adjusted.
  2. Data collected via the Regulated Mortgage Survey.

Download chart

House Price Index by New and Pre-owned Dwellings

During the year to January 2015 prices paid for new dwellings increased by 6.2% on average, compared with an increase of 9.4% in the year to December 2014 (Figure 9). The average UK house price for new dwellings in January 2015 was £255,000.

During the year to January 2015 prices paid for pre-owned dwellings increased by 8.5% on average, compared with an increase of 9.8% in the year to December 2014. The average UK house price for pre-owned dwellings in January 2015 was £274,000.

Figure 9 : UK annual house price rates of change by type of dwelling, January 2004 to January 2015

12 month percentage change

Figure 9 : UK annual house price rates of change by type of dwelling, January 2004 to January 2015
Source: Office for National Statistics

Notes:

  1. Not seasonally adjusted.
  2. Data collected via the Regulated Mortgage Survey.

Download chart

Data Tables

ONS HPI monthly and quarterly reference tables (3.55 Mb Excel sheet) (number 1 to 19). This reference table provides full historical series for the monthly tables accompanying the House Price Index statistical bulletin. This month, tables 1 to 9 have been updated with the latest monthly estimates for January 2015. The seasonally adjusted figures for the last 12 months in Table 7 have also been revised this month as scheduled.

ONS HPI annual tables (1.19 Mb Excel sheet) (number 20 to 39). This reference table contains all the annual HPI tables. This month, tables 22, 23, 24, 25, 26, 27, 28, 31, 32, 33 & 34 have been updated with the latest annual data for 2014. The remaining tables will be updated in July 2015.

ONS weights summary (74 Kb Excel sheet) . This reference table provides a summary of the aggregated mix-adjustment weights used in the production of the HPI for the period 2011 to 2014. The mix-adjustment weights are updated in the February HPI each year.

Response to the Joint Consultation on the Proposed Development of a Single Official House Price Index

A formal response to the October 2014 joint consultation on a proposed single official House Price Index was published on Friday 6 March 2015.

For further information, please contact hpi@ons.gsi.gov.uk

How are we doing?

The Office for National Statistics would welcome your views on the data presented in this statistical bulletin. Please contact the House Price Index team using the email address below to discuss any aspect of the data, including your views on how ONS can improve the data.

hpi@ons.gsi.gov.uk

Background notes

  1. New this month

    New house price data for January 2015 are published this month. The monthly and quarterly reference table (3.55 Mb Excel sheet) has been updated to include data for January 2015. The annual reference table (1.19 Mb Excel sheet) has been partially updated to include the latest annual data for 2014. The remaining tables will be updated in July 2015.

    Revisions this month

    There are small revisions to the seasonally adjusted series for the last 12 months, which are expected from the monthly seasonal adjustment process.

    Revisions next month

    New mix-adjustment index weights for 2015 will be implemented in the next release as scheduled. This update of the weights will revise the January 2015 mix-adjusted prices. For further details on the annual update of weights, please see the 're-weighting' section below.

  2. Relevance of the ONS House Price Index

    The ONS HPI is an important measure of house price inflation for the UK and together with the Land Registry HPI, it is one of the main house price indices used by central and local government to support decision making in the UK. Other users include private individuals, surveyors and analysts in financial institutions.

    The ONS HPI is also an important input into the housing cost component of RPIJ and RPI retail price indices. Each month a customised HPI delivery is produced using a sub-sample of the full data set for use in RPIJ and RPI.

  3. Revisions policy

    At the end of every quarter, as well as releasing final figures for the latest month, ONS revises the figures from the previous two months. This is done because some mortgage lenders, which account for 1 to 2% of all records, provide their data on a quarterly rather than monthly basis. Additionally, data will be revised for the previous month if more than 1,000 additional cases are received in a subsequent month.

    In July 2013 the methodology used to seasonally adjust the HPI was updated following a review and brings the HPI in line with ONS best practice for seasonal adjustment. Seasonal factors are now estimated on a monthly basis and therefore may result in small revisions to the previous 12 months data. This updated process improves the accuracy of the seasonally adjusted figures.

    Other revisions to historical data (other than those currently due for revision) will be made only if the revision is substantial.

    In all cases, the revised figures are labelled with a 'R' and the reason for the revision explained under the 'New this month' section of the background notes.

  4. Methodology

    Data sources

    Since October 2005 the ONS HPI (formerly the DCLG HPI) has been based on a sample of mortgage completions data from the Regulated Mortgage Survey (RMS) as collected by the Council of Mortgage Lenders (CML).

    The number of transactions received from the RMS is affected by the total number of mortgages completed for house purchase in any period. During 2011 the sample covered 65-70% of all UK mortgage completions.

    Quality

    A Quality and Methodology Information (QMI) (131.8 Kb Pdf) paper for the HPI describes in detail the intended uses of the statistics presented in this publication, their general quality and the methods used to produce them.

    Price methodology

    The ONS HPI is mix-adjusted to allow for differences between houses sold (for example type, number of rooms, location) in different months within a year. House prices are modelled using a combination of characteristics to produce a model containing around 100,000 cells (one such cell could be first-time buyer, old dwelling, one bedroom flat purchased in London). Each month estimated prices for all cells are produced by the model and then combined with their appropriate weight to produce mix-adjusted average prices. The index values are based on growth rates in the mix-adjusted average house prices and are annually chain linked. More information on the model used is available via the hedonic model methodology paper (246.4 Kb Pdf) published on the HPI User Guidance webpage.

    Re-weighting

    The ONS HPI is a weighted Laspeyres-type index. In January of each year the index weights are updated based on the relative numbers of transactions during the previous three years, which are grossed to total transactions obtained from Land Registry. Applying new weights ensures that the index keeps up to date with changes in the types of properties that are being purchased, and therefore reflects the price of the average property. A high level summary of the weights used in the calculation of the ONS HPI can be found in the HPI weights summary reference table (74 Kb Excel sheet) .

    One consequence of changing the weights every year is that the mix-adjusted house prices cannot be compared between years as the 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 June 2011, say, is effectively the change in the average price from June to January 2011 (using the weights for 2010) combined with the change in the average price from January to June 2011 using the weights for 2011. 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. More information on the HPI methodology is available on the GOV.UK website.

    Seasonal adjustment

    The housing market shows seasonal effects that affect house prices. For example, prices have tended to be higher during the summer months than during the winter months. These seasonal effects are estimated and adjusted for in order to calculate month-on-month price changes. Seasonally adjusted figures are provided at a national level in Table 7 alongside the non-seasonally adjusted figures of the other tables. Seasonal adjustment is performed each month and reviewed each year, using the standard and widely used software X-13-ARIMA. Seasonally adjusted house price estimates are used to report monthly percentage changes. All other figures such as annual rates of change and average house prices are based on non-seasonally adjusted estimates, unless otherwise stated.

  5. Other house price statistics

    Currently there are a number of different sources of house price statistics published in addition to the ONS HPI. There will be differences in the data published by each source as there are differences in both the data and methodology used. Therefore the ONS HPI is not directly comparable with these other indicators. Further details on the differences between official house price statistics can be found in the article Official House Price Statistics Explained (974.4 Kb Pdf) .

    Land Registry House Price Index

    All residential property transactions in England and Wales are recorded by Land Registry. These transactions are used for calculating the Land Registry index. This index is based on repeat-sales regression, which calculates the change in price of any property transacted twice since 1995. Therefore new build properties are excluded from the index. Land Registry publishes indices at a sub-regional level. The Land Registry HPI is normally published on the 20th working day of every month, and refers to all transactions of the preceding month.

    The Land Registry HPI can be accessed via the Land Registry's website.

    Registers of Scotland Official Quarterly Housing Market Statistics

    Registers of Scotland records all the property transactions in Scotland. It produces average house prices based on arithmetic means of these transactions, which is published as the Quarterly Housing Market Statistics in the second month after the month to which the figures refer to.

    Northern Ireland Residential Property Price Index

    The Land & Property Services assisted by the Northern Ireland Statistics & Research Agency (NISRA) publish a quarterly Residential Property Prices Index (RPPI) for Northern Ireland. The index measures change in the price of residential property sales recorded by Her Majesty's Revenue & Customs. This is a new official statistic, first published in quarter 1 of 2012.

    Halifax House Price Index and Nationwide House Price Index

    Both Halifax and Nationwide produce house price indices based on their own mortgage approvals only and therefore, like the ONS HPI, will not include any cash transactions. They both have UK-wide coverage, and since the Halifax and Nationwide use only their own in-house data they can process them immediately and do not have to await the receipt of data from other lenders. This means that they are more timely than the ONS HPI.

    LSL Acadata House Price Index

    The LSL Acadata (previously the LSL Property Services/Acadametrics) HPI is the only house price index to reflect all transactions, as opposed to data samples, and provides mix and seasonally adjusted results at national, regional and county/unitary district/London borough levels.

    The index can be accessed at Acadata.

  6. Accessibility

    This bulletin includes the January 2015 data. Future publication dates for this statistical bulletin are available via the release calendar.

  7. General

    Details of the policy governing the release of new data are available from the Media Relations Office. Also available is a list of the names of those given pre-release access to the contents of this release.

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  8. Details of the policy governing the release of new data are available by visiting www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html or from the Media Relations Office email: media.relations@ons.gsi.gov.uk

Statistical contacts

Name Phone Department Email
Christopher Jenkins +44 (0)1633 455474 Office for National Statistics christopher.jenkins@ons.gsi.gov.uk
Get all the tables for this publication in the data section of this publication .
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