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News: Strong house price rise shown in new index

Land Registry’s new monthly index shows house prices in England and Wales have risen strongly, with the average house price reaching £169,569. The growth rate has accelerated to 1.3%, compared to the 0.4% growth in the same month last year.

It is the first time since October 2004 that monthly price growth has exceeded 1%.

1 Seasonally adjusted House Price Index (HPI) with base period of April 2000=100

2 All average prices quoted in this report represent standardised seasonally adjusted prices

The index is published by Land Registry using sales data collected on all residential housing transactions, whether for cash or with a mortgage, in England and Wales since April 2000. This gives a baseline index of 100 at April 2000.

Until now the Land Registry index has been issued quarterly.  The new monthly index will be more timely, but of course still a month behind (this release is for September) due to collecting the entire UK residential housing transactions after they have occurred.

The index is calculated by using Land Registry's own 'Price Paid Dataset'. At present it contains details on over seven million sales. Of these, 1.5 million are identifiable matched pairs, providing the basis for the repeat-sales regression analysis used to compile the index. This technique of quality adjustment ensures an ‘apples to apples’ comparison between properties.

 

The annual change shows a similarly solid increase with a 6.3% growth rate. This is the second month running that the annual growth rate has exceeded 5% and is the highest annual growth rate achieved since June 2005. This is in contrast to September last year when the average growth rate was 3.9%.

London’s annual growth rate continues to outpace that of England and Wales as a whole. Between March 2002 and January 2006 London’s annual price growth experienced relative underperformance. However the last seven months have seen price growth in London surpass that of England and Wales.

 

 

 

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