Important points about house price estimates

  • House price inflation is the rate at which the prices of residential property purchased in the UK rise and fall.
  • The UK House Price Index (HPI) was first published in June 2016 and replaces the previous HPIs published by Land Registry and the Office for National Statistics (ONS).
  • UK HPI data is published monthly with historical data available from 1969 (the data is quarterly prior to 1995).
  • The UK HPI is mix-adjusted to allow for differences between houses sold in different periods, for example the type or size of property; the process effectively allows only pure price change to feed into the measurement of inflation as opposed to changes in the composition of what is being sold.
  • The UK HPI is published monthly alongside other important measures of inflation such as consumer price inflation and producer price inflation.

Overview of the output

The UK HPI covers the purchase of residential property within different geographic areas of the UK including local authorities, regions and countries. It is produced jointly by the ONS, Land Registry, Registers of Scotland and Land and Property Services, Northern Ireland and published centrally via GOV.UK.

There is a comprehensive source of administrative data available that records the transaction details of residential property in the UK. This data is combined with supplementary administrative data on the attributes of property in the UK to allow for the production of a house price index that provides comprehensive coverage of the UK. Further details of the methodology used to produce the UK HPI is available from ONS website.

Estimates of price change and average house price levels are provided on a monthly basis for sub-sets of the UK housing market, for example:

  • those properties purchased using cash only or mortgage
  • the type of property (terrace, semi, detached or flat)
  • type of buyer (first-time buyer or existing owner)
  • type of dwelling (new build or existing property)

The UK HPI follows a monthly publication schedule which is lagged by 2 months, due to the time it takes to collect the wide range of housing data used in the calculation process. The latest estimates are usually available within 6 weeks of the reference period, so March house price data would be available in mid-May.

A seasonally adjusted house price index is also produced to account for seasonal effects that show in the transaction of houses.

The production of house price statistics is relevant for a large number of users, including:

  • central and local government
  • financial institutions
  • housing associations
  • investors
  • businesses
  • academics
  • households

House price statistics help these users understand trends in the housing market and make a wide variety of decisions including provision of housing, whether to buy or sell and whether to lend.

Output quality

This page provides a range of information that describes the quality of the data and details any points that should be noted when using the output.

We have developed Guidelines for Measuring Statistical Quality; these are based upon the 5 European Statistical System (ESS) quality dimensions. This document addresses these quality dimensions and other important quality characteristics, which are:

  • relevance
  • timeliness and punctuality
  • coherence and comparability
  • accuracy
  • output quality trade-offs
  • assessment of user needs and perceptions
  • accessibility and clarity

More information is provided about these quality dimensions in the following sections.

About the output

Relevance

(The degree to which statistical outputs meet users’ needs.)

The UK HPI was developed in response to the National Statistician’s Review of House Price Statistics (2010) and built on the October 2014 consultation on the development of a definitive house price index and subsequent published response.

The mix-adjusted HPI series is available from 1995 for England and Wales, 2004 for Scotland and 2005 for Northern Ireland. To aid users, a derived series has also been calculated and published back to 1969. The new UK HPI uses transaction data and applies a hedonic regression model that utilises the various sources of data on property price and attributes to produce up-to-date estimates of the change in house prices each period.

More details of the UK HPI methodology are explained on the ONS website.

The production of house price statistics is relevant for a large number of purposes. Users of official housing market statistics range from central government, local government and devolved administrations through to financial institutions, housing associations, investors, businesses (including estate agents and house builders), academics and households. They use housing market statistics to make a wide variety of decisions including provision of housing, whether to buy, and whether to lend. Details of the main users and their uses of housing market statistics follow.

Further information on the uses of HPI can be found in the National Statistician’s Review of Official Housing Market Statistics.

Timeliness and punctuality

(Timeliness refers to the lapse of time between publication and the period to which the data refer. Punctuality refers to the gap between planned and actual publication dates.)

The UK HPI follows a monthly publication schedule and is lagged by 2 months. This lag is due mainly to the time it takes to collect and process the data.

The exact time of publication of the HPI depends on data availability and delivery, hence the HPI statistical bulletin is published either on the second or third Tuesday of the second month after the reference period.

For more details on related releases, the release calendar is available from the GOV.UK website and provides 12 months’ advance notice of release dates. In the unlikely event of a change to the pre-announced release schedule, public attention will be drawn to the change and the reasons for the change will be explained fully at the same time, as set out in the Code of Practice for Official Statistics.

How the output is created

Data sources

The main sources of price paid data used in the UK HPI are the Land Registry for England and Wales, Registers of Scotland and Her Majesty’s Revenue and Customs Stamp Duty Land Tax data for the Northern Ireland Residential Property Prices Index (RPPI).

Land Registry for England and Wales

Information on residential property transactions for England and Wales, collected as part of the official registration process, will be provided by Land Registry for properties that are sold for full market value. The dataset contains the sale price of the property, the date when the sale was completed, full address details, the type of property (detached, semi-detached, terraced or flat), if it is a newly built property or an established residential building and a variable to indicate if the property has been purchased as a financed transaction (for example, using a mortgage) or as a non-financed transaction (cash purchase).

All this information is currently published by Land Registry in its Price Paid Dataset (PPD), with the exception of the funding status indicator. This is not publicly available as this data is considered personal information and would breach data protection rules.

Registers of Scotland

Registers of Scotland (RoS) provides residential property sales for Scotland in the calculation of the new UK House Price Index (HPI). The Scotland data follow a similar process to the Price Paid Data (PPD) where the data provided for the HPI is a by-product of the Scottish property registration process, whereby property sales are submitted to RoS on completion of a sale. Data are gathered from these applications and entered into the RoS Land Registration System (LRS). A weekly extract of all sales data is then taken from LRS and undergoes a quality assurance process to check the price paid, date of entry, property type (land, commercial, residential, forestry, agricultural and other) and to identify market value residential sales (as opposed to non-market sales similar to those detailed for PPD). This data are then combined with further details, such as full address and house type (detached, semi-detached, terrace or flat), using the RoS Geographical Information System database to provide a comprehensive source of data that can be provided each month for use in the new HPI.

In addition, a funding status indicator and a new build indicator are also added to the final dataset. The funding status indicator is identified by whether the applications for registration of a market value residential sale also contain an application for registration of a standard security mortgage deed. All applications with a mortgage deed are mortgage sales, while all those without an accompanying mortgage deed are marked as being a cash sale. The new build indicator is given to every sale of an individual property from a builder’s development title. The coverage of the RoS data differs to that of the PPD slightly in that transactions relating to residential properties where the buyer or seller is a corporate body, company or business are included within this dataset.

Northern Ireland data

The Land and Property Services Northern Ireland (LSPNI) House Price Index continues to be calculated and published quarterly. Northern Ireland data is provided to ONS quarterly and combined with the Great Britain data to give overall figures for the UK. The overall UK figure is calculated by keeping the house prices in Northern Ireland constant for each month in a quarter. In the 2 months following the end of a quarter, when Northern Ireland results for the most recent quarter are not yet available, indices and house prices for Northern Ireland are carried forward from the previous quarter. They are revised when the quarter is complete.

Council of Mortgage Lenders – Regulated Mortgage Survey

The Regulated Mortgage Survey (RMS) is the Council of Mortgage Lender’s version of the Mortgage Product Sales Data (PSD) that all regulated lenders report to the Financial Conduct Authority (FCA). This is detailed transaction level data on mortgage completions. Starting in April 2005, the RMS now contains over 12 million individual mortgage sale records.

It is collected electronically, with all reporting firms submitting according to FCA-defined data definitions, and in a standard xml format, ensuring consistent data structure. Data coverage is estimated to be around 95% of all regulated mortgages currently advanced. However, some lenders do not permit their data to be transferred to third parties, like ONS, so the share of the market covered by data received by ONS is about 70%.

Reporting fields include purchase price, completion date of property sale, type of borrower (first time buyer (FTB) or home mover) new or second-hand property, type and size of dwelling. The RMS is the only comprehensive source of data available for the type of borrower and provides the necessary data to allow the new HPI to be produced according to whether the buyer is a first-time buyer or an existing owner. The RMS is also an important source of data used in the production of house prices for inclusion in the Retail Prices Index.

This data is used mainly in the calculation of the weights applied to the data after aggregation.

Price methodology

The UK HPI applies a hedonic regression model that uses the various sources of data on property price and attributes to produce up-to-date estimates of the change in house prices each period.

More details of the methodology are in the link UK HPI methodology on the ONS website.

The UK HPI is mix-adjusted to allow for differences between houses sold (for example, type, number of rooms and 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 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.

Re-weighting

The UK HPI is mix-adjusted to allow for the fact that different houses are sold in different periods, by annually updating the weights based on the total number of transactions during the previous period. 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.

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 and regional level as part of the data downloads alongside the unadjusted figures of the other tables.

Seasonal adjustment is performed each month and reviewed each year, using the GSS recommended software X-12-ARIMA. Seasonally adjusted house price estimates are used to report a seasonally adjusted average house price and seasonally adjusted price index. All other figures such as annual rates of change and average house prices are based on unadjusted estimates, unless otherwise stated.

Statistical disclosure

Statistical Disclosure Control methodology is applied to HPI data. This ensures that information attributable to an individual organisation is not disclosed in any publication. The Code of Practice for Official Statistics set out practices for how ONS protects data from being disclosed. The principle includes a guarantee to survey respondents to ”ensure that official statistics do not reveal the identity of an individual or organisation, or any private information relating to them”. More information can be found on the Statistical Disclosure Control page of the ONS website.

Validation and quality assurance

Accuracy

(The degree of closeness between an estimate and the true value.)

Estimates from the HPI are subject to various sources of error. The total error consists of 2 elements, the sampling error and the non-sampling error.

Sampling error

This occurs because we are estimating the predicted price of each property, based on its attributes. However, we only have a selection of attributes to include in the regression model so the predicted price of each property differs from the actual price. The predicted prices are subject to sampling errors given they are calculated from coefficients (each of which has its own standard error) showing each attribute’s contribution to the price. These coefficients and their standard errors, are calculated by the regression model and are being considered for inclusion in future publications.

Non-sampling error

Non-sampling errors are not easy to quantify and include errors of coverage, measurement processing and non-response.

Various procedures are in place to ensure that errors are minimised:

  • validation checks on data, based on extreme values, are conducted to highlight potential unusual prices
  • data cleaning is done to remove erroneous data
  • the minimum and maximum values for house price are investigated
  • house price outliers are validated against external sources
  • ratio analysis (comparing house price with total area and number of bedrooms) is then carried out to check for consistency

Another aspect of quality is reliability. Assessing the difference between the first published estimate and the final revised figure provides an indication of reliability.

House Price Index revisions policy, which is aligned with the Code of Practice, is to show significant revisions, but to suppress minor changes to avoid unnecessary inconvenience to users. There is a time lag of between 2 weeks and 2 months between the sale of a property and the subsequent registration of this information on the Register. As a result, UK HPI data for the 2 most recent months will be subject to revision. This is explained to users under the Background notes.

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

The ONS website contains information on the HPI revisions policy.

Coherence and comparability

(Coherence is the degree to which data that are derived from different sources or methods, but refer to the same topic, are similar. Comparability is the degree to which data can be compared over time and domain, for example, geographic level.)

Currently, there are a number of different sources of house price statistics published in addition to the UK 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 UK HPI is not directly comparable with these other indicators.

Registers of Scotland Official Quarterly Housing Market Statistics

Registers of Scotland record 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 Official Quarterly Housing Market Statistics in the second month after the month to which the figures refer to.

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 timelier than the ONS HPI.

LSL Acadata House Price Index

The LSL Acadata House Price Index (formerly LSL Property Services and 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 or London borough levels. The index can be accessed at LSL Acadata HPI.

In addition, other indices are also produced. Rightmove tracks the asking prices of properties on 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.

Concepts and definitions

(Concepts and definitions describe the legislation governing the output and a description of the classifications used in the output.)

The importance of this index is reflected in the development of a European regulation, introduced in February 2013, which is the first stage in the introduction of owner occupiers’ housing costs into the Harmonised Index of Consumer Prices. The regulation identifies house price indices as ”important indicators in their own right”, reflecting the consequences for an economy of unstable or unsustainable house price development. The European regulation also requires state members to provide quarterly house price indices.

Furthermore, DCLG provides a list of definitions of general housing terms.

Other information

Output quality trade-offs

(Trade-offs are the extent to which different dimensions of quality are balanced against each other.)

A trade-off of accuracy over timeliness is made to produce the monthly HPI. The collection and processing of data from a number of different sources takes time and therefore delays the timely publication of the ONS HPI.

Although the availability of accurate and timely house price statistics is desirable, there are a number of obstacles to their production. These are mainly due to the nature of housing compared with other goods.

Assessment of user needs and perceptions

(The processes for finding out about user and users, and their views on the statistical products.)

As stated previously, there are a number of important uses and users of the HPI. There are also a number of mechanisms through which users are able to provide views on the HPI:

  • public feedback or consultation are sought when methodological improvements are made to the HPI
  • suggestions and comments are sought from the public in each publication and via Twitter and Facebook

A dedicated HPI email address is provided for users to provide feedback:hpi@ons.gsi.gov.uk.

Sources for further information or advice

Accessibility and clarity

(Accessibility is the ease with which users are able to access the data, also reflecting the format in which the data are available and the availability of supporting information. Clarity refers to the quality and sufficiency of the release details, illustrations and accompanying advice.)

Our recommended format for accessible content is a combination of HTML web pages for narrative, charts and graphs, with data being provided in usable formats such as csv and Excel. The ONS website also offers users the option to download the narrative in PDF format. The UK HPI is data are published monthly in csv and linked data formats on<data.gov.uk>.

In some instances other software may be used, or may be available on request. Available formats for content published on the ONS website but not produced by the ONS, or referenced on the ONS website but stored elsewhere, may vary. For further information please refer to the contact details at the beginning of this document.

The latest UK HPI Statistical Bulletin with accompanying briefing notes and reference tables can be downloaded for free from the GOV.UK website from 9.30 am on the day of publication.

There is a list of the names of those given pre-release access to the contents of this release available. The list is from July 2016.

The following data are available (please note that these are updated monthly):

The House Price Index data tables are for customers that would like to download the full dataset in a more usable format which incorporates data behind the UK House Price Index.

The UK HPI search tool allows the user to customise searches of the House Price data using specific areas, dates, house types and indicators.

Data enquiries on the HPI series, compilation methods, developmental articles, quality information or difficulties in finding the latest figures can be emailed to the HPI team in ONS at hpi@ons.gsi.gov.uk . General queries on the UK HPI can also be sent to Land Registry at lorna.jordan@landregistry.gov.uk.

For information regarding conditions of access to data, please refer to:

In addition to this Quality and Methodology Information, quality information relevant to each release is available in the About the UK House Price Index section of the UK HPI release.

Download this methodology

Contact details for this Quality and methodology information

hpi@ons.gsi.gov.uk
Telephone: +44 (0)1633 455474