House Price Index - March 2006

Published	15 May 2006

The mix-adjusted average house price in the UK in March 2006 stood at £186,519, up from £182,925 in February 2006 (not seasonally adjusted).

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

The mix-adjusted average house price in the UK in March 2006 stood at £186,519, up from £182,925 in February 2006 (not seasonally adjusted).
UK annual house price inflation in March 2006 was 3.3 per cent, down from 3.4 per cent in February 2006. Annual house price inflation in London was 4.0 per cent in March 2006, up from 1.5 per cent in February 2006.
The UK annual house price inflation rate for the 3 months to March 2006 was 3.6 per cent, and 3.5 per cent in London.

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

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
2005	Oct	152.7	1.6	131.7	-0.9	184,958
	Nov	153.4	2.2	133.5	1.5	185,848
	Dec	153.3	2.9	133.7	3.8	185,788
2006	Jan R	155.1	4.1	136.1	5.0	185,112
	Feb R	153.2	3.4	132.5	1.5	182,925
	Mar	156.2	3.3	138.4	4.0	186,519

HOUSE PRICE INFLATION: REGIONAL

The UK house price inflation rate fell from 3.4 per cent in February 2006 to 3.3 per cent in March 2006. Prices rose by 2.0 per cent between February and March, compared to a rise of 2.1 per cent seen over the same period last year.

The rise in UK prices between February and March can be attributed to rises in average prices for all property types, in particular for flats (7.7 per cent, after a fall of 4.8 per cent last month), terraced houses (1.7 per cent) and semi-detached houses (1.0 per cent).

All the home countries saw a fall in inflation in March. The inflation rate in England fell from 2.6 per cent in February to 2.5 per cent in March, the inflation rate in Wales fell from 6.1 per cent to 5.3 per cent, in Scotland the rate fell from 11.3 per cent to 10.8 per cent and in Northern Ireland the rate rose from 15.9 per cent to 14.1 per cent.

Figure 2: House price inflation by country

12-month percentag change

Figure 2: House price inflation by country

House price inflation fell in six of the English regions but rose in the other three. The highest inflation rate remain was in Yorkshire and the Humber (7.6 per cent), North West (4.7 per cent), North East and London (both 4.0 per cent). Inflation rates were lower in other parts of England; in South West (1.7 per cent), East Midlands (1.5 per cent), West Midlands (1.2 per cent), South East (0.6 per cent) and East (0.5 per cent). This is the second time since July 2005 that inflation has been positive in all regions.

Figure 3: Regional house price indices

12-month percentage change for last month

HOUSE PRICES: REGIONAL

Mix-adjusted average house prices in March were £195,001 in England, £148,718 in Wales, £132,271 in Scotland and £141,502 in Northern Ireland.

The English region with the highest average house price in March remains London at £274,113. The lowest average price was in the North East at £135,125.

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

Figure 4: Mix-adjusted average house prices

HOUSE PRICE INFLATION: TYPE OF BUYER

The UK house price inflation rate for first time buyers rose from 4.2 per cent in February to 4.6 per cent in March. This was due to a rise of 2.8 per cent in prices between February and March in the properties bought by first time buyers compared with and a smaller rise of 2.5 per cent over the same period last year.

The inflation rate for former owner occupiers fell from 3.2 per cent in February to 2.8 per cent in March. This was due to a rise of 1.7 per cent in prices between February and March in the properties bought by former owner occupiers, compared with a larger rise of 2.0 per cent over the same period last year.

The average price paid by first time buyers across the whole of the UK was £145,214 in March, while the average price paid by former owner occupiers was £204,137.

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

12-month percentage change

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

TABLES

Tables are from October 2003 to March 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 February and January 2006. This is largely the result of a small number of lenders supplying data quarterly. This means that previously published February and January 2006 figures have been revised. Overall, the difference in the published prices is £299 (-0.2%) for February and £292 (-0.2%) for January. 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 2006 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 45,000 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 March, say, is effectively the change in the average price from March 2005 to January 2006 (using last year's weights) combined with the change in the average price from January 2006 to March 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 March. Other recent indicators have been based on asking prices in April or prices based on mortgages approved during April. 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: