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ONS unveils new single UK house price index

ONS unveils new single UK house price index

The Office for National Statistics (ONS) has published early historic England and Wales estimates for its new single UK House Price Index, which will be published in full in June.

Developed jointly with other official producers of house price statistics following a review by the National Statistician, it uses data from, among others, the Land Registry and Council of Mortgage Lenders.

By using these comprehensive datasets together, as well as by employing internationally agreed methods, the new index will give the most detailed picture of the UK housing market, according to a statement from the ONS.

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For the most recent period published (December 2011) it shows an average price level of £185,000 for England and Wales.

This is lower than the price recorded by the current ONS index for England (£222,000) for the same period, but still above the equivalent price levels recorded by the Land Registry for England and Wales (£157,000), the Halifax for the UK (£157,000) and Nationwide for the UK (£163,000).

The main reason for the decrease in price levels is the use of the geometric mean, which reduces the impact of very high value properties on the headline data.

Over the period 2003-2011, which is the longest comparable period available, the average annual growth is 5.2 per cent for the ONS index for England, 4.6 per cent for the Land Registry for England and Wales, 4.7 per cent for the Halifax for the UK, 5.3 per cent for Nationwide for the UK and 6.1 per cent for the new index for England and Wales.

ONS statistician Chris Jenkins said: “For the first time, consistent high-quality data will be available for both national and local areas, helping policymakers to make better decisions.”

Consultation on the development of the single index began back in 2014, noting that the ONS and Land Registry already publish statistics, along with separate registers in Scotland and Northern Ireland.

The review stated: “These various measures can sometimes lead to contradictory messages for users who are unfamiliar with the differences in methodology and scope of each measure. This in turn can make decision-making difficult based on the house price data available.”

Adviser view

Pete Mugleston, director of Online Mortgage Advisor, said: “If the ONS is now including long-term owned and cash-bought property, it’s a given that this will improve the accuracy of its calculations.

“It also makes sense that lowering the impact of high-end properties will undoubtedly improve things, and I’m sure any changes like this are being made to ensure statistics are more representative of the market.”

peter.walker@ft.com