UK House Price Index: April 2020

Monthly house price inflation in the UK, calculated using data from HM Land Registry, Registers of Scotland, and Land and Property Services Northern Ireland.

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Cyswllt:
Email Natalie Jones

Dyddiad y datganiad:
19 August 2020

Cyhoeddiad nesaf:
2 September 2020

1. Main points

  • UK average house prices increased by 2.6% over the year to April 2020, down from 3.5% in March 2020.
  • Average house prices increased over the year in England to £251,000 (2.5%), Wales to £169,000 (5.0%), Scotland to £153,000 (1.6%) and Northern Ireland to £141,000 (3.8%).
  • London’s average house prices increased by 2.3% over the year to April 2020.
  • The UK House Price Index (HPI) is based on completed housing transactions; typically, a house purchase can take six to eight weeks to reach completion, therefore, the price data feeding into the April 2020 UK HPI will reflect those agreements that occurred before the government measures to reduce the spread of the coronavirus (COVID-19) took hold.
  • This is the first publication of the UK HPI since it was suspended in May 2020; this publication includes data up to April 2020 only, further detail on future releases can be found in Section 7: Measuring the data.
  • The Office for National Statistics (ONS) has released a public statement on the coronavirus (COVID-19) and the production of statistics; Section 7: Measuring the data describes the situation in relation to the UK House Price Index (HPI).
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2. UK house prices

UK average house prices increased by 2.6% over the year to April 2020

The UK House Price Index (HPI) is based on completed housing transactions. Typically, a house purchase can take six to eight weeks to reach completion. Therefore, the price data feeding into the April 2020 UK HPI will reflect those agreements that occurred before the government measures to reduce the spread of the coronavirus (COVID-19) took hold.

The number of transactions used for the April 2020 index is slightly lower than the average number of transactions we would usually use for a first estimate; because of this some volatility may be seen at the lower level estimates. The number of new build transactions used has fallen. We have made some minor methodology changes to address this issue, these changes can be found in Section 7: Measuring the data.

The latest house price data published on GOV.UK by HM Land Registry for April 2020 show that average house prices in the UK increased by 2.6% in the year to April 2020, down from 3.5% in the year to March 2020 (Figure 1). The fall in the annual growth rate between March 2020 and April 2020 is because of an increase in house prices between March 2019 and April 2019, compared with a small decrease over the same two months this year.

Over the past three years, there has been a general slowdown in UK house price growth, driven mainly by a slowdown in the south and east of England, but there has been a pickup in annual growth since December 2019.

The average UK house price was £235,000 in April 2020; this is £6,000 higher than in April 2019 (Figure 2).

On a non-seasonally adjusted basis, average house prices in the UK decreased by 0.2% between March 2020 and April 2020, compared with an increase of 0.7% in the same period a year ago.

On a seasonally adjusted basis, average house prices in the UK decreased by 0.9% between March 2020 and April 2020, following an increase of 1.5% in the previous month.

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3. House prices by country

House price growth in Wales increased by 5.0% over the year to April 2020, down from 5.4% in March 2020, with the average house price in Wales at £169,000.

The average house price in Scotland increased by 1.6% over the year to April 2020, down from 2.1% in the year to March 2020, with the average house price in Scotland now at £153,000.

The average house price in England increased by 2.5% over the year to April 2020, down from 3.5% in the year to March 2020, with the average house price in England now at £251,000.

The average house price in Northern Ireland increased by 3.8% over the year to Quarter 1 (January to March) 2020. Northern Ireland remains the cheapest UK country to purchase a property in, with the average house price at £141,000 (Figure 3).

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4. House prices by region

The East Midlands was the English region with the highest annual house price growth, with prices increasing by 4.7% to £201,000 in the year to April 2020, up from 4.0% in March 2020 (Figure 4).

The lowest annual growth was in the North East, where prices decreased by 2.3% over the year to April 2020.

London house prices remain the most expensive at an average of £480,000. The North East continued to have the lowest average house price, at £126,000, and is the only English region yet to surpass its pre-economic downturn peak of July 2007 (Figure 5).

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5. House Price Index data

UK House Price Index
Dataset | Released 19 August 2020
Monthly house price movements, including average price by property type, sales and cash mortgage sales, as well as information on first-time buyers, new builds and former owner occupiers. Data are collected by HM Land Registry and published on GOV.UK.

House price data: quarterly tables
Dataset | Released 19 August 2020
Quarterly house price data based on a sub-sample of the Regulated Mortgage Survey.

House price data: annual tables 20 to 39
Dataset | Released 19 August 2020
Annual house price data based on a sub-sample of the Regulated Mortgage Survey.

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6. Glossary

House Price Index (HPI)

The House Price Index (HPI) measures the price changes of residential housing as a percentage change from a specific time period (12 months prior or a base period, where HPI equals 100).

House price inflation

House price inflation in the UK is the rate at which the prices of residential properties purchased in the UK rise and fall.

Non-seasonally adjusted

A non-seasonally adjusted series is one that includes seasonal or calendar effects.

Seasonally adjusted

A seasonally adjusted series is one that has been subject to a widely used technique for removing seasonal or calendar effects from time series data.

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7. Measuring the data

The UK House Price Index (HPI) is a joint production by HM Land Registry, Registers of Scotland, Land and Property Services Northern Ireland, and the Office for National Statistics (ONS). HM Land Registry publishes the main publication of the UK HPI on the GOV.UK website today (9:30am, 19 August 2020). It includes full details, including commentary, historical data tables and analytical tools.

Coronavirus

The ONS is working to ensure that the UK has the vital information needed to respond to the impact of the coronavirus (COVID-19) pandemic on our economy and society, this includes how we measure the UK House Price Index.

The price collection for this publication has been partially affected. Because of the impact of the coronavirus pandemic, a minor methodology change has been made to the England and Wales estimates to cope with a reduction in the amount of new build transactions being received. The processing of new build properties has been more affected than the processing of “existing” properties. So, in order to address the small number of new build transactions, the new build transactions have been combined for certain months:

  • February 2020 includes new build transactions from both January 2020 and February 2020
  • March 2020 includes new build transactions from both February 2020 and March 2020
  • because of the nature of the processing of the new builds, these are never included in the model for the first estimate, so, April 2020 has not been affected

Further information on how we usually process the new build properties can be found in the Quality and methodology documentation.

The ONS remains committed to providing the best and most accurate information we can, serving the public good at a time when it is needed the most. We will be working to a publication schedule, detailed in ths section, that will see us publish interim releases with a view to resuming normal publication in October with the publication of the August 2020 index. This schedule will ensure we can use as many transactions as possible in each of the suspended periods following the issues caused by the coronavirus pandemic.

As per our usual revisions policy, the figures for all months are first estimates and are subject to revision in subsequent periods.

Provisional publication schedule:

  • 19 August – April 2020 index
  • 2 September – May 2020 index
  • 16 September – June 2020 index
  • 7 October – July 2020 index
  • 21 October – August 2020 index

The decision on when to reinstate the UK House Price Index was made by understanding the minimum number of transactions needed to provide an acceptable level of confidence in the data. Simulations ran on the UK House Price Index model showed approximately 12,000 transactions across England, Scotland and Wales would be an acceptable minimum level. We have now exceeded this number of transactions for April and so we are confident that we can now produce a representative UK House Price Index. Subsequent publications will also meet this minimum level of transactions.

The ONS has released a public statement on COVID-19 and the production of statistics. Specific queries must be directed to the Media Relations Office.

After EU withdrawal

As the UK leaves the EU, it is important that our statistics continue to be of high quality and are internationally comparable. During the transition period, those UK statistics that align with EU practice and rules will continue to do so in the same way as before 31 January 2020.

After the transition period, we will continue to produce our inflation statistics in line with the UK Statistics Authority’s Code of Practice for Statistics and in accordance with internationally agreed statistical guidance and standards.

Data sources

The main sources of data used in the UK are HM Land Registry for England and Wales, Registers of Scotland, and HM Revenue and Customs’ (HMRC’s) Stamp Duty Land Tax data for the Northern Ireland HPI.

Methods

The standard average house price is calculated by taking the geometric mean price in January 2015 and then recalculating it in accordance with the index change back in time and forward to the present day.

The UK HPI 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 in each period.

Quality

More quality and methodology information on strengths, limitations, appropriate uses, and how the data were created is available in the guidance page of the main release published by HM Land Registry on GOV.UK.

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8. Strengths and limitations

Extent of data coverage

The UK House Price Index (UK HPI) can provide a wide coverage of both cash and mortgage transactions and a large data source. Data are available at a local authority level as well as by property type, buyer status, funding statistics and property status.

Time lags

As sales only appear in the UK HPI once the purchases have been registered (based on completed sales rather than advertised or approved prices), there can be a delay before transactions feed into the index. Estimates for the most recent months are provisional and likely to be updated as more data are incorporated into the index. While changes to estimates are small at the headline level, these can be larger changes at lower geographies owing to fewer transactions being used. Caution is therefore advised when interpreting price changes in the most recent periods. Further information is provided in our revisions policy.

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Manylion cyswllt ar gyfer y Bwletin ystadegol

Natalie Jones
hpi@ons.gov.uk
Ffôn: +44 (0)1633 456400