UK House Price Index: August 2022

• UK average house prices increased by 13.6% over the year to August 2022, down from 16.0% in July 2022.

• Despite UK house prices increasing between July and August 2022, annual growth has slowed because of the sharp rise in house prices in August 2021 following changes in the stamp duty holiday.

• The average UK house price was £296,000 in August 2022, which is £36,000 higher than this time last year.

• Average house prices increased over the year to £316,000 (14.3%) in England, to £220,000 in Wales (14.6%), to £195,000 in Scotland (9.7%) and to £169,000 in Northern Ireland (9.6%).

UK average house prices increased by 13.6% over the year to August 2022

The latest house price data published on GOV.UK by HM Land Registry (HMLR) for August 2022 show that average house prices in the UK increased by 13.6% in the year to August 2022, down from 16.0% in the year to July 2022.

The coronavirus (COVID-19) pandemic affected the supply of housing transactions for a period of time. Therefore, while HMLR continue to process the backlog, revisions to the published UK House Price Index (HPI) estimates may be larger than usual. 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 the numbers seen throughout the coronavirus pandemic period. 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.

Consistent price increases since early 2022 have resulted in a record average house price level in the UK of £296,000 in August 2022. The annual growth rate for average UK house prices for August 2022 was 13.6%, compared with 16.0% in the year to July 2022 and 8.1% in the year to June 2022. This is driven by the volatility seen in house prices throughout 2021 because of Stamp Duty holiday changes. For example, tax holiday changes at the end of June 2021 caused average house prices to fall £13,000 in the month to July 2021, followed by an increase of £7,000 into August 2021. There was a smaller increase of £3,000 between July and August 2022. This base effect, where prices are increasing by a smaller amount than the same period last year, has led to the slowing of annual growth this month. Trends in 2022 have been more stable.

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.

UK house prices experienced sharp, temporary rises in March 2021, June 2021 and September 2021. This corresponded with each of the original and extended end dates of the Stamp Duty holiday in UK nations. The final Stamp Duty holiday extension applied to England and concluded in September 2021. It is likely that average house prices were slightly inflated during these months as buyers rushed to complete their house purchases ahead of the Stamp Duty holiday deadlines.

The provisional seasonally adjusted estimate of UK residential transactions in August 2022 was 104,980, as shown in the Monthly property transactions statistics published by HM Revenue and Customs (HMRC). This is 7.6% higher than August 2021 and 1.1% higher than July 2022.

The average UK house price was £296,000 in August 2022; this is £36,000 higher than in August 2021.

On a non-seasonally adjusted basis, average house prices in the UK grew by 0.9% between July and August 2022. This compares with an increase of 3.0% during the same period a year earlier (July and August 2021).

On a seasonally adjusted basis, average house prices in the UK increased by 1.1% between July and August 2022, following an increase of 1.3% in the previous month. Prices increased by 3.3% between July and August 2021.

The average house price in Scotland increased by 9.7% over the year to August 2022, down from an increase of 11.0% in the year to July 2022. The average house price in Scotland was at a record level of £195,000 in August 2022.

The average house price in Wales increased by 14.6% over the year to August 2022, down from an increase of 17.4% in the year to July 2022. The average house price in Wales was at a record level of £220,000 in August 2022.

The average house price in England increased by 14.3% over the year to August 2022, down from an increase of 16.8% in the year to July 2022. The average house price in England was at a record level of £316,000 in August 2022.

The average house price in Northern Ireland increased by 9.6% over the year to Quarter 2 (Apr to Jun) 2022. Northern Ireland remains the cheapest UK country in which to purchase a property, with the average house price at £169,000.

The South West was the region with the highest annual house price growth, with average prices increasing by 17.0% in the year to August 2022. This was down from a growth rate of 21.1% in July 2022.

The lowest annual house price growth was in London, where average prices increased by 8.3% over the year to August 2022, down from 10.1% in July 2022.

Despite having the lowest annual house price growth rate, London’s average house prices remain the most expensive of any region in the UK, with a record average price of £553,000 in August 2022.

The North East continued to have the lowest average house price at £164,000 in August 2022, which is a record high for the region.

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.

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 UK House Price Index reports on GOV.UK (9:30am, 19 October 2022). The reports contain 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.

HM Land Registry transactions (HMLR)

HMLR transactions numbers have been affected mainly because of the impact of coronavirus (COVID-19) 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.

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

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 HMLR's Price Paid Data datasets.

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:

• February 2022 includes new build transactions from January and February 2022

• March 2022 includes new build transactions from February and March 2022

• April 2022 includes new build transactions from March and April 2022

• May 2022 includes new build transactions from April and May 2022

• June 2022 includes new build transactions from May and June 2022

• July 2022 includes new build transactions from June and July 2022

August 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 HMLR's 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 August 2022 are based on approximately 39,000 records for England, which currently represent roughly 41% of monthly property transactions as published by HM Revenue and Customs (HMRC). They are based on approximately 7,000 records for Scotland (72% of transactions) and approximately 2,200 records for Wales (45% 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 August 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.

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 HMLR's Quality and Methodology guidance.

Quality

More quality and methodology information on strengths, limitations, appropriate uses, and how the data were created is available in HMLR's UK House Price Index guidance on GOV.UK.

Further information on strengths and limitations of the data can be found in Section 1.4 of HMLR's Quality and Methodology guidance.