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Statistical bulletin: House Price Index, June 2015

Released: 18 August 2015 Download PDF

Main points

  • UK house prices increased by 5.7% in the year to June 2015, up from 5.6% in the year to May 2015.
  • House price annual inflation was 6.1% in England, 0.8% in Wales, 9.0% in Northern Ireland and -0.6% in Scotland.
  • Annual house price increases in England were driven by an annual increase in the East (9.2%) and the South East (7.7%).
  • Excluding London and the South East, UK house prices increased by 5.2% in the 12 months to June 2015.
  • On a seasonally adjusted basis, average house prices increased by 0.4% between May and June 2015.
  • In June 2015, prices paid by first-time buyers were 5.1% higher on average than in June 2014. For owner-occupiers (existing owners), prices increased by 6.0% 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 us 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 5.7% over the year to June 2015, up from an increase of 5.6% in the year to May 2015 (Figure 1). The average UK mix-adjusted house price in June 2015 was £277,000.

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

12 month percentage change

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

Notes:

  1. Not seasonally adjusted.
  2. Data collected via the regulated mortgage survey.

Download chart

In June 2015, the UK mix-adjusted house price index increased to a record level of 212.6, which is 1.2% higher than the previous record level witnessed in May 2015 (Figure 2). The UK index is now 14.6% higher than the pre-economic downturn peak of 185.5 in January 2008.

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

Index values February 2002=100

Figure 2: Index values, UK all dwellings from January 2004 to June 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 increased by 0.4% between May and June 2015, compared to an increase of 0.3% in average prices during the same period a year earlier.

Table A: house price index - summary of UK all dwellings, June 2015

Index - February 2002=100

House price index: UK all dwellings
Index Percentage 12 month change Index   Percentage monthly change   £
      NSA NSA SA   SA   NSA
2013 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 1.0 252,000
Feb 192.2 9.2 194.8   1.8   253,000
Mar 191.4 8.0 193.6   -0.8 252,000
Apr 197.5 9.9 198.0   2.3   260,000
May 198.9 10.4 199.6   0.8   262,000
Jun 201.2 10.2 200.3 R 0.3 R 265,000
Jul 206.2 11.5 203.4   1.5   272,000
Aug 207.7 11.7 204.9   0.8   274,000
Sep 207.3 12.1 205.9   0.5   273,000
Oct 205.8 10.4 205.9   0.0   271,000
Nov 205.7 9.9 206.4 0.2 271,000
Dec 206.9 9.8 207.8   0.7 272,000
2015 Jan   207.4 8.4 207.5   -0.2   270,000
Feb   206.5 7.4 209.2   0.8 269,000
Mar 209.7 9.6 211.9   1.3   273,000
Apr R 208.6 5.6 209.1 R -1.3 R 272,000
May R 210.0 5.6 210.7 R 0.8 R 274,000
  Jun   212.6 5.7 211.7   0.4   277,000

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 June 2015, average house prices increased 6.1% in England (up from 5.8% in the year to May 2015), 0.8% in Wales (down from 2.7%) and 9.0% in Northern Ireland (down from 11.0%). House prices fell 0.6% in Scotland over the last 12 months (down from 2.2%). This is the first annual fall in Scotland prices since September 2013.

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

12 month percentage change

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

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The England house price index remained at a record level in June 2015 (Figure 4).

The index for England reached 211.0 in June 2015. This is 1.3% above the previous record level in May 2015 (208.2) and 16.7% higher than the pre-economic downturn peak in January 2008 of 180.8. The index for Scotland (225.7) in June 2015 is 7.2% below the record level witnessed in March 2015 (243.2). Scotland prices are now 2.1% below the pre-economic downturn peak of June 2008 (230.6). The index for Wales (216.9) in June 2015 is 3.4% below the record level of 224.6 in January 2015. House prices in Wales are now 2.3% lower than the pre-economic downturn peak of January 2008 (222.1). The index for Northern Ireland (161.4) in June 2015 is 42.7% below the peak of August 2007 (281.5).

Figure 4: Mix-adjusted house price index by UK countries from January 2004 to June 2015

Index level (Feb 2002=100)

Figure 4: Mix-adjusted house price index by UK countries from January 2004 to June 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.

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House price index by region

The pace of annual house price growth picked up in 6 of the 9 English regions in June 2015 (Figure 5). The largest annual increase was in the East at 9.2% (the same as in the year to May 2015) followed by the South East (7.7% increase in the year to June 2015, down from 8.1%). The lowest growth in June 2015 was in the North East; here prices increased by 2.8% over the year (up from 2.0% in May 2015). London prices increased by 5.3% over the year to June 2015 (up from 4.9% in the year to May 2015).

Excluding London and the South East, UK house prices increased by 5.2% over the year to June 2015, up from 5.0% in the year to May 2015.

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

12 month percentage change for June 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.

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This month, average house prices in 6 of the 9 English regions (East Midlands, West Midlands, East, London, South East and South West) are at record levels (Figure 6).

  • The price index for the East Midlands reached a record level of 202.8 in June 2015. This is up 1.3% from the previous record level of 200.2 in May 2015. The price index for the East Midlands is 4.8% higher than the pre-economic downturn peak in January 2008 (193.5).

  • The price index for the West Midlands reached a record level of 191.6 in June 2015. This is 0.2% higher than the previous record of 191.3 in March 2015. The price index for the West Midlands is now 4.2% higher than the pre-economic downturn peak in January 2008 (183.9). 

  • The price index for the East reached a record level of 195.8 in June 2015. This is 0.3% higher than the previous record in May 2015 (195.2) and 16.3% higher than the pre-economic downturn peak in January 2008 (168.4).

  • The price index for London increased to a record level of 249.1 in June 2015. This is 1.8% higher than the previous record in May 2015 (244.8) and 42.8% higher than the pre-economic downturn peak in January 2008 (174.5).

  • The price index for the South East reached a record level of 195.7 in June 2015. This is 1.3% higher than the previous record in April 2015 (193.2) and 17.5% higher than the pre-economic downturn peak in January 2008 (166.5).

  • Finally, the price index for the South West reached a record level of 190.9 in June 2015. This is 0.6% higher than the previous record in April 2015 (189.8) and 6.1% higher than the pre-economic downturn peak in January 2008 (179.9).

Figure 6: Mix-adjusted house price index by selected regions from January 2004 to June 2015

Index level (Feb 2002=100)

Figure 6: Mix-adjusted house price index by selected regions from January 2004 to June 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.

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Average house prices in countries and regions

Average mix-adjusted house prices in June 2015 stood at £290,000 in England, £169,000 in Wales, £154,000 in Northern Ireland and £192,000 in Scotland (Figure 7).

In June 2015, London continued to be the English region with the highest average house price at £513,000 and the North East had the lowest average house price at £156,000. London, the South East and the East all had prices higher than the UK average price of £277,000.

Excluding London and the South East, the average UK mix-adjusted house price was £211,000.

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

House Prices for June 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.

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House price index by type of buyer

The average price for properties bought by first-time buyers increased by 5.1% over the year to June 2015, up from an increase of 4.8% in May 2015 (Figure 8). In June 2015, the average price paid for a house by a first-time buyer was £213,000.

The average price for properties bought by former owner-occupiers (existing owners) increased by 6.0% in the year to June 2015, up from an increase of 5.9% in May 2015. In June 2015, the average price paid for a house by a former owner-occupier was £321,000.

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

12 month percentage change

Figure 8: UK annual house price rates of change by type of buyer, January 2004 to June 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 June 2015, prices paid for new dwellings increased by 9.5% on average, compared with an increase of 10.1% in the year to May 2015 (Figure 9). The average UK house price for new dwellings in June 2015 was £272,000.

During the year to June 2015, prices paid for pre-owned dwellings increased by 5.4% on average, compared with an increase of 5.2% in the year to May 2015. The average UK house price for pre-owned dwellings in June 2015 was £277,000.

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

12 month percentage change

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

Notes:

  1. Not seasonally adjusted.
  2. Data collected via the regulated mortgage survey.

Download chart

Economic context - June 2015

Following relatively strong growth during much of 2014, the rate of house price growth appears to have moderated in recent months. Average UK house prices in June 2015 were 5.7% higher than in the same period a year earlier: just 0.1 percentage points higher than the annual rate in May 2015. On a seasonally adjusted basis, prices grew at a slightly weaker monthly rate of 0.4% while the quarterly rate also eased (Figure 10). Despite this moderation, house price growth remains high relative to the movement of prices in general, likely reflecting a mismatch between strong demand and relatively weak supply throughout much of the UK.

Seasonally adjusted house prices (Figure 10) in the 3 months to June 2015 (April-June) were 0.5% higher than in the preceding 3 months (January-March): the slowest quarterly rate since the 3 months to April 2013. This quarterly rate of change is less affected by month-to-month volatility and therefore gives a better indication of the underlying growth in the housing market. Looking at this measure highlights the strength of the market in early and mid-2014 and its softening in the most recent quarters. In Q3 2014, seasonally adjusted house prices grew by 2.7% on Q2 2014 before falling to 1.0% in Q4 2014 and picking up slightly to 1.4% in Q1 2015. The most recent quarterly growth rate of 0.5% therefore continues this broad moderation.

Figure 10: UK all dwellings monthly and quarterly house price rates of change, January 2005 to June 2015

Seasonally adjusted

Figure 10: UK all dwellings monthly and quarterly house price rates of change, January 2005 to June 2015
Source: Office for National Statistics

Notes:

  1. Analysis based on the seasonally adjusted figures in table 7 of the HPI monthly and quarterly reference table.
  2. Monthly growth is the current month on previous month percentage change from the UK all dwellings seasonally adjusted series.
  3. Quarterly growth is the rolling 3 month growth rate calculated using the UK all dwellings seasonally adjusted series.

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This single headline growth figure masks wide regional variation, with prices falling by 0.6% over the year to June 2015 in Scotland, but rising by 9.0% in Northern Ireland (not seasonally adjusted). Over the past three months, house prices in Northern Ireland have grown faster than any other UK region, continuing the consistently strong pace of growth seen since mid-2014. However, average house prices in Northern Ireland remain the lowest in the UK and are still 42.7% below their pre-downturn peak in August 2007, highlighting the steep falls they experienced between 2008 and 2012. This strong growth in Northern Ireland likely reflects an ongoing mismatch between demand and supply. As the RICS and Ulster Bank Residential Market Survey for Northern Ireland reports for June, increasing number of buyers combined with a limited supply of residential properties have continued to push Northern Ireland house prices higher.

This mismatch is also found in the UK housing market more widely. As highlighted in the Bank of England’s August Inflation Report, demand for house purchases appears strong. The new buyer enquiries balance from RICS’ Residential Market Survey has improved markedly in recent months and, consistent with that reported rise in demand, mortgage approvals for house purchases in Q2 2015 were 8.2% higher than in Q1 2015. Reflecting this growth in demand, UK home sales increased for the second consecutive month in June, rising by 4.7% between May and June to 104,590.

Although demand shows signs of continued strength, supply remains weak. Our output in the construction industry release indicates a 4.6% increase in the volume of house building in the year to June: the lowest annual growth rate since March 2013. The latest RICS’ data shows that new instructions to sell fell in June and that the stock of homes available for sale declined for the third successive month. This combination of well-supported demand and increasingly tight supply continues to support market prices.

Broader economic indicators suggest that the economy has continued to grow relatively strongly over recent periods, with output increasing by 0.7% in the second quarter of 2015. Labour market conditions have continued to improve, as unemployment remained at 5.6% in the three months to June 2015 and pay continued to increase. Recent weakness in inflationary pressure and a return of real earnings growth has also improved the economic position of households. Households’ income expectations and the availability of credit will affect their decision of whether to purchase a new home: decisions which could have implications for the evolution of house prices.

 

Data tables

The HPI monthly and quarterly reference table (3.63 Mb Excel sheet) 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 June 2015. The seasonally adjusted figures in Table 7 have been revised this month as scheduled. This month, tables 10 to 19 have been updated with the latest data for the second quarter of 2015.

The HPI annual reference table (1.19 Mb Excel sheet) contains all the annual live tables. No annual tables have been updated this month. The next set of updates to annual tables will be in March 2016.

The HPI weights summary (83.5 Kb Excel sheet) reference table provides a summary of the aggregated mix-adjustment weights used in the production of the HPI for the period 2007 to 2015. The mix-adjustment weights are updated in the February HPI each year.

Housing statistics portal

We recently published the housing statistics portal. This portal provides users with a platform to access a range of official statistics and analysis on housing.

For further information, please contact HPI@ons.gov.uk

Development of a single, official house price index - update

We published a progress update last month regarding the development of a single official house price index. On 30 July 2015, the United Kingdom Statistics Authority published a special assessment of the development to date, which assessed compliance with the Code of Practice for Official Statistics1 in respect of those aspects essential to the planning and development of methods for the new index.

A further update regarding progress towards implementation of the new index will be published in due course.

For further information, please contact Hpi@ons.gov.uk

Notes for Development of a single, official house price index - update

  1. http://www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html

How are we doing?

We 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 we can improve the data.

hpi@ons.gsi.gov.uk

Background notes

  1. New this month

    New house price data for June 2015 are published this month. The monthly and quarterly reference table (3.63 Mb Excel sheet) has been updated to include data for June 2015 and the second quarter of 2015.

    Revisions this month

    April and May 2015 data have been revised this month to incorporate transactions from those lenders that provide data on a quarterly basis. 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

    No revisions are expected for the July 2015 HPI, apart from the normal revisions to the latest 12 months that follow the monthly seasonal adjustment process.

  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, we revise the figures from the previous 2 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 our 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 and Property Services assisted by the Northern Ireland Statistics and 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 and 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 or unitary district or London borough levels.

    The index can be accessed at Acadata.

  6. Accessibility

    This bulletin includes the June 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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