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• House Price Index June 2006

House Price Index June 2006

The mix-adjusted average house price in the UK in June 2006 stood at £190,883, up from £190,065 in May 2006 (not seasonally adjusted).

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

• The mix-adjusted average house price in the UK in June 2006 stood at £190,883, up from £190,065 in May 2006 (not seasonally adjusted).
• UK annual house price inflation in June 2006 was 5.2 per cent, down from 5.6 per cent in May 2006. Annual house price inflation in London was 5.8 per cent in June 2006, down from 7.0 per cent in May 2006.
• The UK annual house price inflation rate for the 3 months to June 2006 was 5.3 per cent, and 6.5 per cent in London.

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

HOUSE PRICE INFLATION: REGIONAL

The UK house price inflation rate fell from 5.6 per cent in May 2006 to 5.2 per cent in June 2006. Although prices rose by 0.4 per cent between May and June, there was a larger rise of 0.8 per cent over the same period last year. 
 
The small rise in UK prices between May and June can be attributed to small rises in average prices for semi detached houses (0.9 per cent), and terraced houses (0.7per cent).

In the home countries in June, England and Scotland saw falls in inflation, while inflation rose in Wales and Northern Ireland. The inflation rate in England fell from 5.1 per cent in May to 4.6 per cent in June; the inflation rate in Scotland fell from 9.7 per cent to 8.5 per cent. In Northern Ireland the rate rose from 18.0 per cent to 18.5 per cent; in Wales the rate rose from 4.8 per cent to 8.2 per cent.

Figure 2: House price inflation by country

12-month percentage change

House price inflation fell in seven of the English regions and rose in two. The highest inflation rate was in Yorkshire and the Humber (6.7 per cent) followed by London (5.8 per cent), North East (5.5 per cent) and South West (5.0 per cent).  Inflation rates were lower in other parts of England, in North West (4.9 per cent), West Midlands (4.4 per cent) and South East (4.3 per cent). Inflation rates were lowest in East (2.8 per cent) and East Midlands (1.9 per cent).

Figure 3: Regional house price indices 

12-month percentage change for the latest month 

HOUSE PRICES: REGIONAL

Mix-adjusted average house prices in June were £198,952 in England, £155,041 in Wales, £138,672 in Scotland and £149,784 in Northern Ireland.

The English region with the highest average house price in May remains London at £279,763. The lowest average price was in the North East at £138,998.

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 6.3 per cent in May to 6.8 per cent in June. This was due to a rise of 0.5 per cent in prices between May and June in the properties bought by first time buyers compared with a smaller rise of less than 0.1 per cent over the same period last year.

The inflation rate for former owner occupiers fell from 5.4 per cent in May to 4.7 per cent in June. Although there was a rise of 0.4 per cent in prices between May and June in the properties bought by former owner occupiers, this was less than the 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 £149,215 in May, while the average price paid by former owner occupiers was £208,657.

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

12-month percentage change

TABLES

Tables are from January 2004 to June 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 April and May 2006. This is largely the result of a small number of lenders supplying data quarterly. This means that previously published April and May 2006 figures have been revised. Overall, the difference in the published prices is £14 (0.0%) for May and -£195 (-0.1%) for April. 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 June, say, is effectively the change in the average price from June 2005 to January 2006 (using last year's weights) combined with the change in the average price from January 2006 to June 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 June. Other recent indicators have been based on asking prices in July or prices based on mortgages approved during July. 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 507 and 508 and tables 590 to 594.

9. The next three release dates are:

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

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

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