House Price Index Headline Findings - February 2008

The latest national statistics from the House Price Index produced by Communities and Local Government were released on Tuesday 15 April 2008.

Key statistics from the release include:

House prices for January 2008 have been revised from those published last month due to the annual mix-adjustment weights being updated.
The mix-adjusted average house price in the UK in February 2008 stood at £217,737, down from £221,278 in January 2008 (not seasonally adjusted).
UK annual house price inflation in February 2008 was 6.7 per cent, down from 8.0 per cent in January 2008. Annual house price inflation in London was 9.5 per cent in February, down from 13.8 per cent in January.
By country annual house price inflation was highest in Scotland (9.7 per cent) and lowest in Northern Ireland (3.7 per cent) and Wales (3.8 per cent). Prices rose by 6.6 per cent in England.
For the quarter ending February 2008 UK house prices fell by 0.5 per cent. This compares with a decline of 0.2 per cent for the three months ending November 2007.

The full House Price Index - February 2008 Statistical Release and the accompanying tables are available below:

House Price Index - February 2008 (PDF, 96 kb, 9 pages)
House Price Index - February 2008 (MS Word, 101 kb, 9 pages)
A1: Mix-adjusted house price index and annual inflation by region (MS Excel, 47 kb)
A2: Mix-adjusted average house prices by region (MS Excel, 36 kb)
A3: Mix-adjusted house price index and annual inflation by type of buyer, UK (MS Excel, 32 kb)
A4: Mix-adjusted average house prices by type of buyer, UK (MS Excel, 27 kb)

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Notes to editors

1. The mix-adjusted house price series are produced by Communities and Local Government and are being published as official statistics. 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 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 February, say, is effectively the change in the average price from February 2007 to January 2008 (using the weights for 2007) combined with the change in the average price from January 2008 to February 2008 using the weights for 2008. 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 when the time intervals are taken into account. The 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. The Communities and Local Government house price index figures in this issue are based on completions during the month of February. Other recent indicators have been based on asking prices in March or prices based on mortgages approved during March. 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.

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 website in Housing Market Live tables 507, 508 and tables 590 to 594.

9. The next three release dates are:

Tuesday 13 May 2008
Tuesday 10 June 2008
Tuesday 8 July 2008

Enquiries:

Media Enquiries: office hours: 020 7944 3049
out of hours: 020 7944 5945
e-mail: press.office@communities.gov.uk
Public enquiries: e-mail: housing.statistics@communities.gov.uk
Telephone: 020 7944 4400