House Price Index - March 2007

Published	14 May 2007

The mix-adjusted average house price in the UK in March 2007 stood at £206,890, up from £204,556 in February 2007 (not seasonally adjusted).

Download this release as a PDF: House Price Index March 2007

The mix-adjusted average house price in the UK in March 2007 stood at £206,890, up from £204,556 in February 2007 (not seasonally adjusted).

UK annual house price inflation in March 2007 was 10.9 per cent, down from 11.8 per cent in February 2007. Annual house price inflation in London was 13.9 per cent in March, down from 16.1 per cent in February.

The UK annual house price inflation rate for the 3 months to March was 11.2 per cent and 14.3 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
			Not seasonally adjusted
2006	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	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

House price inflation: regional

The UK house price inflation rate fell from 11.8 per cent in February 2007 to 10.9 per cent in March 2007. Between February and March there was a rise of 1.1 per cent in the prices index of properties bought compared with a larger rise of 2.0 per cent over the same period last year resulting in a decrease in the inflation rate.

The rise in UK prices between February and March can be attributed to increases in average prices for semi-detached dwellings (2.2 per cent), terraced houses (1.5 per cent), flats (1.1 per cent) and bungalows (0.7 per cent) and only partly offset by a fall in the price of detached houses (0.2 per cent).

England, Scotland and Wales saw decreases in inflation in March 2007. The inflation rate in England fell from 10.7 per cent in February to 9.8 per cent in March; the inflation rate in Scotland fell from 16.6 per cent to 14.8 per cent; in Wales the rate fell from 10.7 per cent to 9.7 per cent. Northern Ireland was the only home country where the inflation rate rose, from 48.5 per cent to 50.1 per cent.

House price inflation rose in two of the English regions remained level in one region and fell in six regions.

The highest inflation rate was in London (13.9 percent) followed by South East (10.0 per cent), South West (9.3 per cent) and the East (9.1 per cent). Inflation rates were lower in the North West (8.4 per cent), North East (7.9 per cent) and Yorkshire and the Humber (7.8 per cent). The lowest inflation rates were in the West and East Midlands (7.1 per cent and 7.0 per cent respectively).

House prices: regional

Mix-adjusted average house prices in March were £214,424 in England, £161,191 in Wales, £151,468 in Scotland and £217,579 in Northern Ireland.

The English region with the highest average house price in March remains London at £316,308. The lowest average price was in the North East at £144,383.

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 fell from 12.2 per cent in February to 10.8 per cent in March. There was a rise of 1.5 per cent in the prices index between February and March in the properties bought by first time buyers compared with a larger rise of 2.8 per cent over the same period last year.

The inflation rate for former owner occupiers fell from 11.6 per cent in February to 10.9 per cent in March. There was a rise of 1.0 per cent in the prices index between February and March in the properties bought by former owner occupiers, compared with a larger rise of 1.7 per cent over the same period last year.

The average price paid by first time buyers across the whole of the UK was £157,917 in March, while the average price paid by former owner occupiers was £230,916.

Tables

Tables are from September 2004 to March 2007.

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 2007. This is largely the result of a small number of lenders supplying data quarterly. This means that previously published February and January 2007 figures have been revised. Overall, the difference in the published prices is -£546 (-0.3 per cent) for February and - £115 (-0.1per cent) 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 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 March, say, is effectively the change in the average price from March 2006 to January 2007 (using the weights for 2006) combined with the change in the average price from January 2007 to March 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 March. Other recent indicators have been based on asking prices in April or prices based on mortgages approved during April. 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: