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Statistical bulletin: House Price Index, June 2013

Released: 13 August 2013 Download PDF

Key findings

  • In the 12 months to June 2013 UK house prices increased by 3.1%, up from a 2.9% increase in the 12 months to May 2013.
  • House price growth remains stable across most of the UK, although prices in London are increasing faster than the UK average.
  • The year-on-year increase reflected growth of 3.3% in England and 4.3% in Wales, offset by falls of 0.9% in Scotland and 0.4% in Northern Ireland.
  • Annual house price increases in England were driven by London (8.1%), the West Midlands (3.1%) and the South East (2.9%).
  • Excluding London and the South East, UK house prices increased by 1.0% in the 12 months to June 2013.
  • On a seasonally adjusted basis, UK house prices increased by 0.4% between May and June 2013.
  • In June 2013, prices paid by first-time buyers were 3.9% higher on average than in June 2012. For owner-occupiers (existing owners) prices increased by 2.7% for the same period.

About this statistical bulletin

The Office for National Statistics (ONS) House Price Index (HPI), previously published by the Department for Communities and Local Government (DCLG), is a monthly release that publishes figures for mix-adjusted average house prices and house price indices for the UK, its component countries and regions. The index is calculated using mortgage financed transactions that are collected via the Regulated Mortgage Survey by the Council of Mortgage Lenders. These cover the majority of mortgage lenders in the UK. The HPI complements other measures of inflation published by ONS such as the Consumer Price Indices, the Producer Price Indices and the Services Producer Price Indices.

This statistical bulletin provides comprehensive information on the change in house prices on a monthly and annual basis. It also includes analysis by country, region, type of buyer (first-time buyers and former owner-occupiers) and type of dwelling (new dwelling or pre-owned dwelling). Historical series for all accompanying tables that transferred from DCLG are also available in the data section of this release.

The figures published in this release are not seasonally adjusted unless otherwise stated.

House Price Index UK summary

UK average house prices increased by 3.1% over the year to June 2013, up from an increase of 2.9% in the year to May 2013. This increase follows the moderate house price increases the UK has experienced since April 2012 (see Figure 1 below). The average UK mix-adjusted house price in June 2013 was £242,000.

Figure 1: UK all dwellings annual house price rates of change

12 month percentage change

Figure 1: UK all dwellings annual house price rates of change

Notes:

  1. Not seasonally adjusted.
  2. Data collected via the Regulated Mortgage Survey.

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Figure 2 below shows the UK mix-adjusted House Price Index. Price levels are now at similar levels to mid-2008 prices but remain slightly below the peak of January 2008.

Figure 2: UK all dwellings index values

Index values February 2002=100

Figure 2: UK all dwellings index values

Notes:

  1. Not seasonally adjusted.
  2. Data collected via the Regulated Mortgage Survey.

Download chart

On a seasonally adjusted basis, average house prices increased by 0.4% between May and June 2013 compared with an increase of 0.3% in average prices during the same period in 2012.

Table A: House Price Index June 2013 - Summary of UK all dwellings

Index - February 2002=100

House Price Index: UK All Dwellings
Index % 12 month change Index   % monthly change   £
      NSA NSA SA   SA   NSA
2011 Jun 173.1 -2.3 172.7 0.4 214,000
Jul 175.6 -1.6 173.2 0.3 217,000
Aug 176.0 -1.5 173.7 0.3 218,000
Sep 175.2 -1.6 173.2 -0.2 217,000
Oct 174.2 -0.5 174.2 0.5 216,000
Nov 173.8 -0.5 174.0 -0.2 215,000
Dec 173.0 -0.4 174.1 -0.1 214,000
2012 Jan 175.5 0.6 174.8 0.4 229,000
Feb 172.8 1.0 175.2 0.2 226,000
Mar 172.6 -0.4 174.6 -0.4 225,000
Apr 175.1 1.4 175.8 0.5 229,000
May 175.1 2.3 175.8 0.0 229,000
Jun 177.1 2.3 176.4 R 0.3 R 231,000
Jul 179.1 2.0 176.6 0.1 234,000
Aug 179.3 1.9 176.8 0.1 234,000
Sep 178.2 1.7 176.5 -0.2 233,000
Oct 176.7 1.4 176.9 0.2 231,000
Nov 177.6 2.2 177.9 0.6 232,000
Dec 178.7 3.3 179.8 R 1.1 233,000
2013 Jan 179.2 2.1 178.6 -0.7 237,000
Feb 176.1 1.9 178.7 0.1 R 233,000
Mar 177.3 2.7 179.6 0.5 235,000
Apr R 179.7 2.6 180.4 R 0.5 R 238,000
May R 180.2 2.9 181.0 R 0.4 R 239,000
  Jun   182.5 3.1 181.8   0.4   242,000

Table notes:

  1. Prices rounded to the nearest £1,000.
  2. Average house prices are not comparable between years as they reflect a different mix of houses being transacted. Indices have been chain linked so they are comparable year-on-year. For more information please see the re-weighting section in the background notes.
  3. Seasonally adjusted figures for the previous 12 months can be subject to revision.
  4. SA = Seasonally adjusted.
  5. NSA = Not seasonally adjusted.
  6. R = data revised.

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House Price Index by country

During the year to June 2013, average house prices increased by 3.3% in England and by 4.3% in Wales, which were offset by decreases of 0.9% in Scotland and 0.4% in Northern Ireland.

Figure 3: All dwellings annual house price rates of change by country

12 month percentage change

Figure 3: All dwellings annual house price rates of change by country

Notes:

  1. Not seasonally adjusted.
  2. Data collected via the Regulated Mortgage Survey.

Download chart

House Price Index by region

Average house prices increased in seven of the nine English regions over the year to June 2013. The largest increase was London (8.1%), followed by the West Midlands (3.1%) and the South East (2.9%). Prices fell by 0.2% in Yorkshire and The Humber and were unchanged in the South West.

Figure 4: All dwellings annual house price rates of change: country and region

12 month percentage change for June 2013

Figure 4: All dwellings annual house price rates of change: country and region

Notes:

  1. Not seasonally adjusted.
  2. Data collected via the Regulated Mortgage Survey.

Download chart

Average house prices in countries and regions

Average mix-adjusted house prices in June 2013 stood at £251,000 in England, £162,000 in Wales, £130,000 in Northern Ireland and £181,000 in Scotland.

In June 2013, London continues to be the English region with the highest average house price at £425,000. The North East had the lowest average house price at £145,000. London, the South East and the East of England all had prices higher than the UK average price of £242,000.

Excluding London and the South East, the average UK mix-adjusted house price was £190,000.

Figure 5: Mix-adjusted average house price: UK, country and region

Prices for June 2013

Figure 5: Mix-adjusted average house price: UK, country and region

Notes:

  1. Not seasonally adjusted.
  2. Data collected via the Regulated Mortgage Survey.

Download chart

House Price Index by type of buyer

The average price for properties bought by first-time buyers increased by 3.9% over the year to June 2013, down from an increase of 4.1% in May 2013. During June 2013 the average price paid for a house by a first-time buyer was £182,000.

The average price for properties bought by former owner-occupiers (existing owners) increased by 2.7% in the year to June 2013, up from an increase of 2.5% in May 2013. In June 2013, the average price paid for a house by a former owner-occupier was £277,000.

Figure 6: UK annual house price rates of change: type of buyer

12 month percentage change

Figure 6: UK annual house price rates of change: type of buyer

Notes:

  1. Not seasonally adjusted.
  2. Data collected via the Regulated Mortgage Survey.

Download chart

House Price Index by new and pre-owned dwellings

During the year to June 2013 prices paid for new dwellings increased by 3.4% on average, compared with an increase of 1.4% in the year to May 2013. The average UK house price for new dwellings in June 2013 was £233,000.

During the year to June 2013 prices paid for pre-owned dwellings increased by 3.1% on average, compared with an increase of 3.0% in the year to May 2013. The average UK house price for pre-owned dwellings in June 2013 was £242,000.

Figure 7: UK annual house price rates of change: type of dwelling

12 month percentage change

Figure 7: UK annual house price rates of change: type of dwelling

Notes:

  1. Not seasonally adjusted.
  2. Data collected via the Regulated Mortgage Survey.

Download chart

Data tables

ONS HPI monthly and quarterly reference tables (number 1 to 19). (3.31 Mb Excel sheet) This reference table provides full historical series for the monthly tables accompanying the House Price Index statistical bulletin. This month, tables 1 to 9 have been updated with the latest monthly data for June 2013 and scheduled quarterly revisions to April and May 2013 data to account for those lenders who provide data on a quarterly basis. The seasonally adjusted figures for the last 12 months in Table 7 have also been revised this month as scheduled. This reference table also contains all the quarterly live tables transferred to ONS from DCLG. This month, tables 10 to 19 have been updated with the latest data for quarter two of 2013. Please note that during the transfer ONS renumbered the live tables. Full details of the new table numbers and their corresponding DCLG table numbers can be found in the 'contents' page of the reference table.

ONS HPI annual tables (number 20 to 39). (1.16 Mb Excel sheet) This reference table contains all the annual live tables transferred to ONS from DCLG. No annual tables have been updated this month. The next scheduled update of this table is March 2014.

Background notes

  1. New this month

    New house price data for June 2013 are published this month. The  monthly and quarterly reference table (3.31 Mb Excel sheet) has been updated to include data for June 2013, along with data for quarter two of 2013.

    Revisions this month

    April and May 2013 data have been revised this month to incorporate transactions from those lenders that provide data on a quarterly basis. There are small revisions to the seasonally adjusted series for the last 12 months, which are expected from the monthly seasonal adjustment process.

    Revisions next month

    The July 2013 HPI will incorporate changes from the annual review of the seasonal adjustment process. This review may lead to small revisions to the seasonally adjusted series going back to February 2002.

  2. Taking forward the recommendations from the National Statistician’s review of UK house price statistics

    Following the publication of the National Statisticians review of house price statistics in 2010, the current producers of official house price statistics have been in consultation regarding how best to take forward the review recommendations.

    Following initial discussions, it was agreed that the current ONS HPI would be developed to become the measure that best meets the user requirements laid out in the 2010 review, mainly by expanding the coverage of the index to include cash sales data. The inclusion of cash sales would be carried out by using Land Registry data to supplement the current ONS dataset.


    Analysis has shown that this proposed development would not meet the recommendations laid out in the review, namely the development of a joint, single definitive UK house price index as, under this approach, each of the current departments would continue to produce their own indices in their current format leading to confusion for users.

    Therefore, following agreement across the four producers of official house price statistics, it is proposed that a joint project is initiated to consider the development of a single definitive UK House Price Index from which official providers can report on their own areas of responsibility in a way that can be directly compared. This collaborative approach would allow the publishing of consistent HPI data at a national, regional and sub-regional level across the UK.

    The first stage of this development is to consider how the current data sources and methodologies can be used to produce a single, definitive HPI that meets user requirements. It is expected that this initial analysis will take approximately three to four months at which time a more substantial note on the plans, methods and timetable for the implementation of the index will be published. This note was first published in the May 2013 HPI.

  3. Index of Private Housing Rental Prices

    On 26 June 2013 ONS published the Index of Private Housing Rental Prices (IPHRP). IPHRP is an experimental series that measures the changes in price charged for renting private housing in Great Britain. The index is calculated from rental prices collected by Valuation Office Agency, Scottish Government and Welsh Government, and includes price indices at country level and English region level.

  4. Relevance of the ONS House Price Index

    The ONS HPI is an important measure of house price inflation for the UK and together with the Land Registry HPI, it is one of the main house price indices used by central and local government to support decision making in the UK. Other users include private individuals, surveyors and analysts in financial institutions.

    The ONS HPI is also an important input into the housing cost component of the Retail Prices Index (RPI). Each month a customised HPI delivery is produced using a sub-sample of the full data set for use in the RPI.

  5. Revisions policy

    At the end of every quarter, as well as releasing final figures for the latest month, ONS revises the figures from the previous two months. This is done because some mortgage lenders, which account for 1 to 2% of all records, provide their data on a quarterly rather than monthly basis. Additionally, data will be revised for the previous month if more than 1,000 additional cases are received in a subsequent month.

    In July 2012 the methodology used to seasonally adjust the HPI was updated following a review and brings the HPI in line with ONS best practice for seasonal adjustment. Seasonal factors are now estimated on a monthly basis and therefore may result in small revisions to the previous 12 months data. This updated process improves the accuracy of the seasonally adjusted figures. 

    Other revisions to historical data (other than those currently due for revision) will be made only if the revision is substantial.

    In all cases, the revised figures are labeled with a 'R' and the reason for the revision explained under the 'New this month' section of the background notes.

  6. Methodology

    Data sources

    Since October 2005 the ONS HPI (formerly the DCLG HPI) has been based on a sample of mortgage completions data from the Regulated Mortgage Survey (RMS) as collected by the Council of Mortgage Lenders (CML).

    The number of transactions received from the RMS is affected by the total number of mortgages completed for house purchase in any period. During 2011 the sample covered 65-70% of all UK mortgage completions.

    Price methodology

    The ONS HPI is mix-adjusted to allow for differences between houses sold (for example type, number of rooms, location) in different months within a year. House prices are modelled using a combination of characteristics to produce a model containing around 100,000 cells (one such cell could be first-time buyer, old dwelling, one bedroom flat purchased in London). Each month estimated prices for all cells are produced by the model and then combined with their appropriate weight to produce mix-adjusted average prices. The index values are based on growth rates in the mix-adjusted average house prices and are annually chain linked. More information on the model used is available via the hedonic model methodology paper (246.4 Kb Pdf) published on the HPI User Guidance webpage

    Re-weighting

    The ONS HPI is a weighted Laspeyres-type index. In January of each year the index weights are updated based on the relative numbers of transactions during the previous three years, which are grossed to total transactions obtained from Land Registry. Applying new weights ensures that the index keeps up to date with changes in the types of properties that are being purchased, and therefore reflects the price of the average property.

    One consequence of changing the weights every year is that the mix-adjusted house prices cannot be compared between years as the 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 2011, say, is effectively the change in the average price from June to December 2010 (using the weights for 2010) combined with the change in the average price from January to June 2011 using the weights for 2011. 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. More information on the HPI methodology is available on the DCLG Website.

    Seasonal adjustment

    The housing market shows seasonal effects that affect house prices. For example, prices have tended to be higher during the summer months than during the winter months. These seasonal effects are estimated and adjusted for in order to calculate month-on-month price changes. Seasonally adjusted figures are provided at a national level in Table 7 alongside the non-seasonally adjusted figures of the other tables. Seasonal adjustment is performed each month and reviewed each year, using the standard and widely used software X-12-ARIMA. Seasonally adjusted house price estimates are used to report monthly percentage changes. All other figures such as annual rates of change and average house prices are based on non-seasonally adjusted estimates, unless otherwise stated.

  7. Other house price statistics

    Currently there are a number of different sources of house price statistics published in addition to the ONS HPI. There will be differences in the data published by each source as there are differences in both the data and methodology used. Therefore the ONS HPI is not directly comparable with these other indicators. Further details on the differences between official house price statistics can be found in the article Official House Price Statistics Explained.

    Land Registry House Price Index

    All residential property transactions in England and Wales are recorded by Land Registry. These transactions are used for calculating the Land Registry index. This index is based on repeat-sales regression, which calculates the change in price of any property transacted twice since 1995. Therefore new build properties are excluded from the index. Land Registry publishes indices at a sub-regional level. The Land Registry HPI is normally published on the 20th working day of every month, and refers to all transactions of the preceding month.

    The Land Registry HPI can be accessed via the Land Registry's website.


    Registers of Scotland House Price Index

    Registers of Scotland records all the property transactions in Scotland. It produces average house prices based on arithmetic means of these transactions, which is published as the Registers of Scotland House Price Index in the second month after the month to which the figures refer to.

    Northern Ireland Residential Property Price Index

    The Land & Property Services assisted by the Northern Ireland Statistics & Research Agency (NISRA) publish a quarterly Residential Property Prices Index (RPPI) for Northern Ireland. The index measures change in the price of residential property sales recorded by Her Majesty's Revenue & Customs. This is a new official statistic, first published in quarter 1 of 2012.


    Halifax House Price Index and Nationwide House Price Index

    Both Halifax and Nationwide produce house price indices based on their own mortgage approvals only and therefore, like the ONS HPI, will not include any cash transactions. They both have UK-wide coverage, and since the Halifax and Nationwide use only their own in-house data they can process them immediately and do not have to await the receipt of data from other lenders. This means that they are more timely than the ONS HPI.

    LSL Property Services/Acadametrics House Price Index

    The LSL Property Services/Acadametrics HPI is the only house price index to reflect all transactions, as opposed to data samples, and provides mix and seasonally adjusted results at national, regional and county/unitary district/London borough levels.

    The index can be accessed at Acadametrics.

    In addition, other indices are also produced. Rightmove tracks the asking prices of properties in its website and the Royal Institute of Chartered Surveyors (RICS) produces an opinion survey of its surveyors regarding the direction that prices are moving in.

    Full details on the alternative house price statistics can be accessed via the National Statistician's Review of House Price Statistics.

  8. Accessibility

    This bulletin includes the June 2013 data. Future publication dates for this statistical bulletin are available via the Publication Hub.

  9. General

    Details of the policy governing the release of new data are available from the Media Relations Office. Also available is a list of the names of those given pre-release access to the contents of this release.

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  10. Details of the policy governing the release of new data are available by visiting www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html or from the Media Relations Office email: media.relations@ons.gsi.gov.uk

Statistical contacts

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