Letter for publication in response to an article in The Times on 18 April 2012.
Issue date: 18 April 2012
Type: Letter to the Press
Your article ‘We don't need these figures’ (The Times, 18 April 2012) suggests the house price index ‘..should have been buried’.
The ONS house price index (HPI) is an important measure of house price inflation for the UK and together with the Land Registry HPI is used by central and local government to support decision making in the UK. It is also used widely by private individuals, surveyors and analysts in financial institutions. It differs from other indices primarily in terms of the point of the process when the house price is captured. The ONS HPI uses information at completion of the sale. Other indices, for example the Halifax and Nationwide, use mortgage offers by the financial institution publishing the index while the Rightmove index uses advertised prices and so includes houses that do not sell. The Land Registry index, which is based on repeat sales, excludes properties that have not sold twice since 1995 and new build properties.
The ONS HPI is also an important input into the housing cost component of the Retail Prices Index (RPI) and in future could be used in calculating owner-occupiers' housing costs when they are included in the Consumer Prices Index (CPI). For these uses ONS requires a measure that is produced according to sound methods and is managed impartially and objectively.
Finally, the transfer of the HPI to ONS is only the first step in a programme of work to implement the recommendations from the National Statistician's Review of Housing Statistics, which will see ONS develop the measure so that it becomes the definitive index of house prices in the UK.
Head of Prices Division,
Office for National Statistics,
Newport NP10 8XG