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• House Price Index May 2007

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House Price Index May 2007

Published	16 July 2007

Download this release as a PDF: House Price Index May 2007 (PDF).

• The mix-adjusted average house price in the UK in May 2007 stood at £211,056, up from £209,454 in April 2007 (not seasonally adjusted).
• UK annual house price inflation in May 2007 was 10.9 per cent, down from 11.3 per cent in April 2007. Annual house price inflation in London was 14.5 per cent in May, up from 14.0 per cent in April. 
• The UK annual house price inflation rate for the 3 months to May was 11.0 per cent and 14.1 per cent in London.
  

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

		UK		London		Uk
		All	dwellings	All	dwellings	All dwellings
		Index	% change	Index	% change	£
		feb 02=100	over 12 months	feb 02=100	over 12 months
2006	Nov	166.9	8.8	146.7	9.9	199,238
	Dec	168.5	9.9	149.5	11.8	201,090
2007	Jan	171.9	10.8	153.8	13.0	205.284
	Feb	171.3	11.8	153.8	16.1	204,556
	Mar	173.2	10.9	157.6	13.9	206,890
	Apr	175.4	11.3	159.6	14.0	209,454
	May	176.7	10.9	161.5	14.5	211,056

House Price Inflation: Regional

The UK house price inflation rate fell from 11.3 per cent in April 2007 to 10.9 per cent in May 2007. Between April and May there was a rise of 0.7 per cent in the prices index of properties bought compared with a larger rise of 1.1 per cent over the same period last year resulting in a decrease in the inflation rate.

Figure 2: House prive inflation by country

12-month percentage change



The rise in UK prices between April and May can be attributed to increases in average prices for Flats (1.8 per cent), terraced houses (0.9 per cent), semi-detached dwellings (0.6 per cent), detached properties (0.3 per cent) and bungalows (0.1 per cent).

England, Scotland, Wales and Northern Ireland all saw decreases in inflation in May 2007. The inflation rate in England fell from 10.0 per cent in April to 9.8 in May; the inflation rate in Scotland fell from 17.8 per cent to 15.5; in Wales the rate fell from 9.0 per cent to 8.9 per cent and Northern Ireland the rate fell from 54.1 per cent to 51.9 percent.

House price inflation rose in three of the English regions, remained level in one region and fell in five regions.

Figure 3: Regional house price indices

12-month percentage change for the latest



The highest inflation rate was in London (14.5 percent) followed by South East (9.9 per cent), South West (9.4 per cent). Inflation rates were lower in Yorkshire and the Humber (9.3 per cent), East (8.8 per cent) and the North West (7.9 per cent). The lowest inflation rates were in the East Midlands (6.7 per cent), West Midlands (5.9 per cent) and the North East (5.8 per cent).

House Prices: Regional

Mix-adjusted average house prices in May were £218,225 in England, £163,852 in Wales, £157,974 in Scotland and £229,519 in Northern Ireland.

Figure 4: Mix-adjusted average house prices

Not seasonally adjusted



The English region with the highest average house price in May remains London at £324,084. The lowest average price was in the North East at £146,023.

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 remained unchanged at 11.2 in May. There was a rise of 1.3 per cent in the prices index between April and May in the properties bought by first time buyers compared with the same per cent rise over the same period last year.

Figure 5: UK annual house price inflation by type of buyer

12-month percentage



The inflation rate for former owner occupiers fell from 11.3 per cent in April to 10.8 per cent in May. There was a rise of 0.6 per cent in the prices index between April and May in the properties bought by former owner occupiers, compared with a larger rise of 1.1 per cent over the same period last year.

The average price paid by first time buyers across the whole of the UK was £162,055 in May, while the average price paid by former owner occupiers was £235,095.

Tables

Tables are from October 2004 to May 2007.

A1: Mix-adjusted house price index and annual inflation by region (Excel).
A2: Mix-adjusted average house prices by region (Excel).
A3: Mix-adjusted house price index and annual inflation by type of buyer, UK (Excel).
A4: Mix-adjusted average house prices by type of buyer, UK (Excel).

Additional tables and earlier monthly data can be accessed in the 'Live tables' section (housing market) 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. The index will undergo a quality audit during 2007 with a view to gaining accreditation 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 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 April, say, is effectively the change in the average price from April 2006 to January 2007 (using the weights for 2006) combined with the change in the average price from January 2007 to April 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 May. Other recent indicators have been based on asking prices in June or prices based on mortgages approved during May. 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 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.

House Price Index May 2007 Table (Excel)

9. The next three release dates are:

• Monday 13 August 2007
• Monday 10 September 2007
• Monday 15 October 2007

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