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House Price Index - January 2007

Published	12 March 2007

The mix-adjusted average house price in the UK in January 2007 stood at £205,286, up from £201,090 in December 2006 (not seasonally adjusted).

Download this release as a PDF: House Price Index January 2007.

• The mix-adjusted average house price in the UK in January 2007 stood at £205,286, up from £201,090 in December 2006 (not seasonally adjusted).
• UK annual house price inflation in January 2007 was 10.9 per cent, up from 9.9 per cent in December 2006. Annual house price inflation in London was 13.2 per cent in January 2007, up from 11.8 per cent in December 2006.
• The UK annual house price inflation rate for the 3 months to January 2007 was 9.9 per cent and 11.6 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	Feb 02 = 100	over 12
			months		months
2006	Aug	165.0	7.4	144.1	7.6	197,009
	Sept	166.3	8.0	146.4	9.0	198,552
	Oct	165.6	8.5	145.4	10.4	197,740
	Nov	166.9	8.8	146.7	9.9	199,238
	Dec	168.5	9.9	149.5	11.8	201,090
2007	Jan	172.0	10.6	154.1	13.2	205,286

HOUSE PRICE INFLATION: REGIONAL

The UK house price inflation rate rose from 9.9 per cent in December 2006 to 10.9 per cent in January 2007. Between December 2006 and January 2007 there was a rise of 2.1 per cent in the prices index of properties bought compared with a lower increase of 1.1 per cent over the same period last year resulting in an increase in the inflation rate.

Figure 2: House price inflation by country

12-month percentage change

The rise in UK prices between December and January can be attributed to rises in average prices for detached houses (4.9 per cent), terraced houses (2.0 per cent), bungalows (1.5 per cent) and flats (1.3 per cent). The price of semi-detached houses rose by less than 0.1 per cent.

In the home countries in January 2007, England, Scotland, Wales and Northern Ireland all saw increases in inflation. The inflation rate in England rose from 8.9 per cent in December 2006 to 9.9 per cent in January 2007; the inflation rate in Scotland rose from 15.2 per cent to 15.9 per cent; in Wales the rate rose from 9.1 per cent to 10.2 per cent; in Northern Ireland the rate rose from 39.9 per cent to 42.5 per cent.

House price inflation rose in six of the English regions. The exceptions were the South East, where it remained constant, and North East and West Midlands, where it fell. The highest inflation rate was in London (13.2 percent) followed by the North West (11.1 per cent), Yorkshire and the Humber (10.7 per cent) and the South West (9.7 per cent). Inflation rates were lower in South East (8.7 per cent), East (8.3 per cent), and North East (8.2 per cent). The lowest inflation rates were in the East and West Midlands (both 7.6 per cent).

Figure 3: Regional house price indices

HOUSE PRICES: REGIONAL

Mix-adjusted average house prices in January were £212,845 in England, £162,610 in Wales, £150,509 in Scotland and £198,476 in Northern Ireland.

The English region with the highest average house price in December remains London at £305,248. The lowest average price was in the North East at £145,091.

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

HOUSE PRICE INFLATION: TYPE OF BUYER

The UK house price inflation rate for first time buyers rose from 9.4 per cent in December to 10.6 per cent in January. There was a rise of 1.9 per cent in the prices index between December and January in the properties bought by first time buyers compared with a rise of 0.8 per cent over the same period last year.

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

12-month percentage change

The inflation rate for former owner occupiers rose from 10.0 per cent in December to 11.0 per cent in January. There was a rise of 2.1 per cent in the prices index between December and January in the properties bought by former owner occupiers, compared with a rise of 1.2 per cent over the same period last year.

The average price paid by first time buyers across the whole of the UK was £158,097 in January, while the average price paid by former owner occupiers was £225,415.

TABLES

Tables are from July 2004 to January 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
A4: Mix-adjusted average house prices by type of buyer, UK

Additional tables and earlier monthly data can be accessed in the 'Live tables' section (housing market) at /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 December, say, is effectively the change in the average price from December 2005 to January 2006 (using the weights for 2005) combined with the change in the average price from January 2006 to December 2006 using the weights for 2006. 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. The prices for January 2007 published in this Statistical Release use the weights for 2006 to enable a proper comparison with the prices for December 2006. Prices for January on 2007 weights will be published along with the prices for February on 16 April.

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 December. Other recent indicators have been based on asking prices in February or prices based on mortgages approved during February. 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 /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 16 April 2007
• Monday 14 May 2007
• Monday 11 June 2007

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