UK House Price Index: January 2022

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 Ceri Lewis

Dyddiad y datganiad:
23 March 2022

Cyhoeddiad nesaf:
13 April 2022

1. Main points

  • UK average house prices increased by 9.6% over the year to January 2022, down from 10.0% in December 2021.

  • The average UK house price was £274,000 in January 2022, which is £24,000 higher than this time last year.

  • Average house prices increased over the year; in England to £292,000 (9.4%), in Wales to £206,000 (13.9%), in Scotland to £183,000 (10.8%) and in Northern Ireland to £159,000 (7.9%).

  • London continues to be the region with the lowest annual growth at 2.2%.

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2. UK house prices

UK average house prices increased by 9.6% over the year to January 2022

The latest house price data published on GOV.UK by HM Land Registry (HMLR) for January 2022 show that average house prices in the UK increased by 9.6% in the year to January 2022, down from 10.0% in the year to December 2021 (Figure 1).

Because of the impact of the coronavirus (COVID-19) pandemic on both the number and supply of housing transactions, we might see larger revisions to the published UK House Price Index (HPI) estimates than usual.

There may be increased volatility in this month's estimates, particularly at the lower geographical levels where transaction volumes are smaller. We are looking at options to improve this, including working with data suppliers.

In particular, HMLR has been increasing the level of automation in the way they process applications. As a result of this process, initial data numbers may be lower than pre-coronavirus pandemic transaction volumes. However, in the medium to long term, this will lead to higher volumes being processed.

The total number of processed transactions feeding into this month's release (including those from previous months, which are incorporated in line with our revisions policy) has increased compared with recent months. While this indicates an improvement in the quality of the UK HPI estimates going forward, it may also result in revisions to previous months that are higher than usual, as more transactions are now available in our calculations. Further information on this can be found in Section 7: Measuring the data.

The latter half of 2020 saw the UK's average house price growth accelerating. This trend continued into 2021; the UK average house price for January 2022 was £274,000, up from £273,000 in December 2021.

On 8 July 2020, changes to the tax paid on property purchases were announced with immediate effect in England and Northern Ireland. Similar changes came into effect slightly later in Scotland and Wales (15 July and 27 July, respectively). In England and Northern Ireland, properties up to the value of £500,000 would incur no tax, while the thresholds for Scotland and Wales were £250,000. These changes in the tax paid on housing transactions may have allowed sellers to request higher prices as the buyers' overall costs were reduced.

On 3 March 2021, an extension to the Stamp Duty holiday in England and Northern Ireland was announced. This meant that the tax holiday was extended until 30 June 2021, after which the threshold decreased to £250,000 until 30 September 2021. From 1 October 2021, the Stamp Duty thresholds have reverted to what they were before 8 July 2020. The tax holiday for Scotland ended on 31 March 2021. The tax holiday for Wales ended on 30 June 2021.

As the tax breaks were originally scheduled to conclude at the end of March 2021, it is likely that March's average house prices were slightly inflated as buyers rushed to ensure their house purchases were scheduled to complete ahead of this deadline. This effect was then further exaggerated in June 2021 in line with the extension to the holiday on taxes paid on property purchases in England, Wales and Northern Ireland. They could be seen again in September 2021 when the last of the tax holidays came to an end in England. An increase in prices since then has resulted in a record average house price level in the UK of £274,000 in January 2022.

Monthly property transactions statistics published by HM Revenue and Customs show that the provisional seasonally adjusted estimate of UK residential transactions in January 2022 is 106,990, which is 10.6% lower than January 2021 and 5.1% higher than December 2021.

The average UK house price was £274,000 in January 2022; this is £24,000 higher than in January 2021 (Figure 2).

On a non-seasonally adjusted basis, average house prices in the UK increased by 0.4% between December 2021 and January 2022, down from 0.7% during the same period a year earlier (December 2020 and January 2021).

On a seasonally adjusted basis, average house prices in the UK increased by 0.7% between December 2021 and January 2022, following an increase of 0.6% in the previous month.

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3. House prices by country

The average house price in Wales increased by 13.9% over the year to January 2022, up from an increase of 12.4% in December 2021, with the average house price in Wales now at a record level of £206,000.

The average house price in Scotland increased by 10.8% over the year to January 2022, up from an increase of 10.2% in the year to December 2021, with the average house price in Scotland now at £183,000, similar to the peak seen in November 2021.

The average house price in England increased by 9.4% over the year to January 2022, down from an increase of 9.9% in the year to December 2021. The average house price in England is now at a record level of £292,000.

The average house price in Northern Ireland increased by 7.9% over the year to Quarter 4 (Oct to Dec) 2021. Northern Ireland remains the cheapest UK country to purchase a property in, with the average house price at £159,000 (Figure 3).

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4. House prices by region

The East Midlands was the region with the highest annual house price growth, with average prices increasing by 11.6% in the year to January 2022. This was up from 10.4% in December 2021 (Figure 4).

The lowest annual house price growth was in London, where average prices increased by 2.2% over the year to January 2022, down from 5.1% in December 2021.

Despite being the region with the lowest annual growth, London's average house prices remain the most expensive of any region in the UK, with an average price of £510,000 in January 2022.

The North East continued to have the lowest average house price at £151,000.

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5. House Price Index data

UK House Price Index
Dataset | Released 23 March 2022
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 16 February 2022
Quarterly house price data based on a sub-sample of the Regulated Mortgage Survey and an unrevised arithmetic mean version of the mix adjusted House Price Index (HPI) for Great Britain.

House price data: annual tables 20 to 39
Dataset | Released 23 March 2022
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 the HPI in 2015 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 (HMLR), Registers of Scotland, Land and Property Services Northern Ireland, and the Office for National Statistics (ONS). HMLR publishes the main publication of the UK HPI on the GOV.UK website (9:30am, 23 March 2022). It contains full details, including commentary, historical data tables and analytical tools.

Economic statistics governance after EU exit

Following the UK's exit from the EU, new governance arrangements are being put in place that will support the adoption and implementation of high-quality standards for UK economic statistics. These governance arrangements will promote international comparability and add to the credibility and independence of the UK's statistical system.

At the centre of this new governance framework will be the new National Statistician's Committee for Advice on Standards for Economic Statistics (NSCASE). NSCASE will support the UK by ensuring its processes for influencing and adopting international statistical standards are world leading. The advice NSCASE provides to the national statistician will span the full range of domains in economic statistics. This includes the National Accounts, fiscal statistics, prices, trade and the balance of payments and labour market statistics.

Coronavirus (COVID-19)

In the past 12 months, all those involved in the property market have been affected by coronavirus (COVID-19). HMLR is no different, and as a result of this, the HPI data are not as complete as they could be. HMLR is focusing on their core purpose of registering land, and this includes recording the price paid for a property.

This means that the UK HPI may be subject to increased revisions as more data are added over the coming months.

HMLR's priority is to reduce any delays, both those caused by the coronavirus pandemic and those existing beforehand. To simultaneously deliver their services while promoting public health, they are adjusting their resources where necessary, introducing automation where practical, and recruiting and training more than 500 new staff members.

We have temporarily changed the date we receive the transaction data from HMLR. As a result, we receive more transactions than those immediately seen in the published Price Paid Data.

The processing of new build properties has been more affected than the processing of "old build" properties. So, to address this, we have pooled new build transactions for certain months in England and Wales, which means that:

  • July 2021 includes new build transactions from June and July 2021

  • August 2021 includes new build transactions from July and August 2021

  • September 2021 includes new build transactions from August and September 2021

  • October 2021 includes new build transactions from September and October 2021

  • November 2021 includes new build transactions from October and November 2021

  • December 2021 includes new build transactions from November and December 2021

January 2022 has not been affected as new builds are never included in the model for the first estimate because of the nature of their processing.

These changes might lead to larger revisions to published estimates than usual as we reduce the reliance on pooling. Further information on how we usually process the new build properties can be found in the Quality and methodology guidance.

Sales volumes

Sales only appear in the UK HPI once the purchases have been registered or submitted for registration in the case of sales in Scotland (based on completed sales rather than advertised or approved prices). Therefore, 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.

The latest estimates for January 2022 are based on approximately 14,100 records for England, which currently represent roughly 20% of monthly property transactions as published by HM Revenue and Customs (HMRC). They are based on approximately 6,000 records for Scotland (80% of transactions) and approximately 900 records for Wales (23% of transactions). This represents the number of records that are available at the time of calculating the UK HPI and not the number of transactions that have taken place. As time progresses, more records will become available for January 2022, in line with our published revision policy.

However, it should be noted that there are some coverage differences between the sales volumes used in the UK HPI dataset and the monthly property transactions statistics data. This means that the two are not directly comparable, and sales volumes in the UK HPI are unlikely to ever reach the transaction levels published by HMRC. It is believed that the main reason for this difference is that residential properties where the buyer or seller is a corporate body. Company or business are excluded from the HMLR data in the UK HPI, but included in HMRC property transaction statistics.

Upcoming changes

HMLR is currently increasing the level of automation in the way they process applications. As a result of this process, initial data numbers may be slightly lower. However, in the medium to long term, this will lead to a better service and higher volumes. HMLR is also planning full automation regarding the collection of price paid data over the next 18 months, which will also have a positive impact on HPI.

Weights update

In next month's release (to be published on 13 April 2022) we will be updating the underlying weights used in the UK HPI production process to aggregate the index. We update the weights underpinning the UK HPI each year so that the index remains representative of the latest housing market conditions. More information on the methodology can be found in the Quality and methodology document.

Data sources

The main sources of data used in the UK are HMLR for England and Wales, Registers of Scotland, and HMRC's Stamp Duty Land Tax data for the Northern Ireland HPI.

Methods

The method for calculating the UK HPI can be found in our Quality and Methodology guidance.

Quality

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

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8. Strengths and limitations

Further information on strengths and limitations of the data can be found in Section 1.4 of the Quality and methodology guidance.

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Manylion cyswllt ar gyfer y Bwletin ystadegol

Ceri Lewis
hpi@ons.gov.uk
Ffôn: +44 1633 456400