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House Price Index July 2006

Published	11 September 2006

The mix-adjusted average house price in the UK in July 2006 stood at £194,454, up from £191,016 in June 2006 (not seasonally adjusted).

Download this release as a PDF: House Price Index July 2006

• The mix-adjusted average house price in the UK in July 2006 stood at £194,454, up from £191,016 in June 2006 (not seasonally adjusted).
• UK annual house price inflation in July 2006 was 6.0 per cent, up from 5.3 per cent in June 2006. Annual house price inflation in London was 7.1 per cent in July 2006, up from 5.5 per cent in June 2006.
• The UK annual house price inflation rate for the 3 months to July 2006 was 5.7 per cent, and 6.6 per cent in London.

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

		UK		London		UK
		All dwellings		All dwellings		All dwellings
		Index Feb 02 = 100	% change over 12 months	Index Feb 02 = 100	% change over 12 months	£
		Not seasonally adjusted
2006	Feb	153.2	3.4	132.5	1.5	182,925
	March	156.2	3.3	138.4	4.0	186,519
	Apr	157.6	5.0	140.0	6.7	188,095
	May R	159.3	5.7	141.0	7.0	190,065
	Jun R	160.0	5.3	140.8	5.5	191,016
	Jul	162.9	6.0	144.1	7.1	194,454

HOUSE PRICE INFLATION: REGIONAL

The UK house price inflation rate rose from 5.3 per cent in June 2006 to 6.0 per cent in July 2006. Prices rose by 1.8 per cent between June and July, compared with a smaller rise of 1.1 per cent over the same period last year. 

The rise in UK prices between June and July can be attributed to small rises in average prices for detached houses (0.6 per cent), terraced houses (0.5 per cent), and semi detached houses (0.5 per cent).

Figure 2: House price inflation by country 12-month percentage change

In the home countries in June, England and Scotland saw increases in inflation, while inflation fell in Wales and Northern Ireland. The inflation rate in England rose from 4.6 per cent in June to 5.5 per cent in July; the inflation rate in Scotland rose from 8.9 per cent to 9.3 per cent. In Northern Ireland the rate fell from 19.1 per cent to 18.3 per cent; in Wales the rate fell from 8.5 per cent to 7.4 per cent.
 
House price inflation rose in seven of the English regions, fell in the West Midlands and remained constant in the South East. The highest inflation rate was in Yorkshire and the Humber (8.4 per cent) followed by London (7.1 per cent), North West (6.2 per cent), North East (5.8) and South West (5.6 per cent).  Inflation rates were lower in other parts of England, in South East (4.5 per cent) and East (4.3 per cent). Inflation rates were lowest in East and West Midlands (3.9 per cent) and (3.3 per cent) respectively.

Figure 3: Regional house price indices - 12-month percentage change for the latest month

HOUSE PRICES: REGIONAL

Mix-adjusted average house prices in July were £202,660 in England, £156,205 in Wales, £140,460 in Scotland and £158,104 in Northern Ireland.

The English region with the highest average house price in July remains London at £285,434. The lowest average price was in the North East at £140,609

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 fell from 6.9 per cent in June to 5.6 per cent in July. Although there was a rise of 0.6 per cent in prices between June and July in the properties bought by first time buyers, this was less than the larger rise of 1.9 per cent over the same period last year.

The inflation rate for former owner occupiers rose from 4.8 per cent in June to 6.1 per cent in July. This was due to a rise of 2.2 per cent in prices between June and July in the properties bought by former owner occupiers compared with a smaller rise of 0.8 per cent over the same period last year.

The average price paid by first time buyers across the whole of the UK was £150,252 in June, while the average price paid by former owner occupiers was £213,309.

Figure 5: UK annual house price inflation by type of buyer - 12-month percentage change

TABLES

Tables are from February 2004 to July 2006.

A1: Mix-adjusted house price index and annual inflation by region.

A2: Mix-adjusted average house prices by region.

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.

This month we received some additional data for May and June 2006. This is largely the result of a small number of lenders supplying late data. This means that previously published May and June 2006 figures have been revised. Overall, the difference in the published prices is £146 (0.1%) for May and £133 (0.1%) for June. Larger revisions have occurred in some regions and in type of buyer prices. The change in prices is not an error but the result of an additional data.

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 July, say, is effectively the change in the average price from July 2005 to January 2006 (using last year's weights) combined with the change in the average price from January 2006 to July 2006 using this year's weights. 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. 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. Communities and Local Government uses expenditure weights, whereas other indices use transaction weights. Consequently, 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 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 Communities and Local Government house price index figures released in this issue are based on completions during the month of July. Other recent indicators have been based on asking prices in August or prices based on mortgages approved during August. Therefore Communities and Local Government figures are not directly comparable with these other indicators.

6. A month on month comparison of 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 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 Communities and Local Government web site in Live tables - Housing Market section, tables 590 and 591 and tables 592 to 594.

9. The next three release dates are:

• Monday 9 October  2006
• Monday 13 November 2006
• Monday 11 December 2006

Public enquiries:   e-mail:  hprices.rsls@communities.gov.uk 

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