The UK’s Office for National Statistics (ONS) released its latest statistical bulletin for the UK House Price Index, March 2014 on Tuesday, which show that house price annual inflation increased in most parts of Britain, especially in London.
House prices in the UK increased by 8.0% in the 12 months ending March 2014, down from 9.2% in the year to February 2014. This was driven by the highest increase of 17.0% in London, as well as a rise of 6.6% in the East of England and 6.1% in the South East. Excluding London and the South East, UK house prices rose by 4.7% in the year to March 2014. However, on a seasonally adjusted basis, average house prices fell by 0.5% between February and March 2014. Properties belonging to owner-occupiers increased by 7.2% for the same period.
The English region with the highest house prices is London, which had an average price of £459,000 recorded in March this year, while the North East region had the lowest average house price at £148,000. The UK average house price is £252,000 and apart from London, the South East and the East regions have the highest priced properties compared to other regions in the UK. Excluding London and the South East, the average UK mix-adjusted house price was £195,000 in March this year.
ONS data for the House Price Index by Country shows that house price annual inflation in England was 8.5% and in Wales it was 4.9%, while Scotland and Northern Ireland had slight increases at just 0.8% and 0.3% respectively. Average mix-adjusted house prices in March 2014 were £263,000 in England, £164,000 in Wales, £132,000 in Northern Ireland and £181,000 in Scotland.
Average prices for properties bought by first-time buyers increased by 10.0%, over the year to March 2014, compared to an increase of 10.5% in February 2014. The average price paid for a house by a first-time buyer was £193,000 in March 2014.
On average, prices for new houses increased by 2.1% during the year to March 2014. During the same period, the average price for new dwellings in the UK was £236,000.
The House Price Index is calculated using mortgage financed transactions that are collected via the Regulated Mortgage Survey by the Council of Mortgage Lenders, which 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. The index is said to be an important measure of house price inflation for the UK and is one of the main house price indices used by central and local government to support decision making in the UK. It is also used by private individuals, surveyors and analysts in financial institutions.