UK House Price Index: May 2020

• UK average house prices increased by 2.9% over the year to May 2020, up from 2.7% in April 2020.

• Average house prices increased over the year in England to £252,000 (2.9%), Wales to £169,000 (4.8%), Scotland to £155,000 (2.1%) and Northern Ireland to £141,000 (3.8%).

• London's average house price increased by 3.3% over the year to May 2020.

• The UK House Price Index (HPI) is based on completed housing transactions; typically, a house purchase can take six to eight weeks to reach completion, therefore, the price data feeding into the May 2020 UK HPI will mainly reflect those agreements that occurred before the government measures to reduce the spread of the coronavirus (COVID-19) took hold.

• The Office for National Statistics (ONS) has released a public statement on the coronavirus (COVID-19) and the production of statistics; Section 7: Measuring the data describes the situation in relation to the UK House Price Index (HPI).

UK average house prices increased by 2.9% over the year to May 2020

The UK House Price Index (HPI) is based on completed housing transactions. Typically, a house purchase can take six to eight weeks to reach completion. Therefore, the price data feeding into the May 2020 UK HPI will mainly reflect those agreements that occurred before the government measures to reduce the spread of the coronavirus (COVID-19) took hold.

Given the impact of the coronavirus on the availability and supply of housing transactions, we may see larger than usual revisions to our provisional estimates over the next few months, as more transactions become available with which we can calculate the HPI. More information on this can be found in Section 7: Measuring the data.

The latest house price data published on GOV.UK by HM Land Registry for May 2020 show that average house prices in the UK increased by 2.9% in the year to May 2020, up from 2.7% in the year to April 2020 (Figure 1).

Over the past three years, there has been a general slowdown in UK house price growth, driven mainly by a slowdown in the south and east of England, but there has been a pickup in annual growth since December 2019.

The average UK house price was £236,000 in May 2020; this is £7,000 higher than in May 2019 (Figure 2).

On a non-seasonally adjusted basis, average house prices in the UK increased by 0.3% between April 2020 and May 2020, compared with an increase of 0.1% in the same period a year ago.

On a seasonally adjusted basis, average house prices in the UK increased by 0.2% between April 2020 and May 2020, following a decrease of 0.2% in the previous month.

House price growth in Wales increased by 4.8% over the year to May 2020, up from 3.2% in April 2020, with the average house price in Wales at £169,000.

The average house price in England increased by 2.9% over the year to May 2020, up from 2.8% in the year to April 2020, with the average house price in England now at £252,000.

The average house price in Scotland increased by 2.1% over the year to May 2020, unchanged since April 2020, with the average house price in Scotland now at £155,000.

The average house price in Northern Ireland increased by 3.8% over the year to Quarter 1 (January to March) 2020. Northern Ireland remains the cheapest UK country to purchase a property in, with the average house price at £141,000 (Figure 3).

Yorkshire and The Humber was the English region with the highest annual house price growth, with prices increasing by 4.9% to £170,000 in the year to May 2020, up from 2.0% in April 2020 (Figure 4).

The lowest annual growth was in the East of England, where prices increased by 0.7% over the year to May 2020.

London house prices remain the most expensive at an average of £479,000. The North East continued to have the lowest average house price, at £135,000, and is the only English region yet to surpass its pre-economic downturn peak of July 2007 (Figure 5).

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 HPI 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, Registers of Scotland, Land and Property Services Northern Ireland, and the Office for National Statistics (ONS). HM Land Registry publishes the main publication of the UK HPI on the GOV.UK website today (9:30am, 2 September 2020). It includes full details, including commentary, historical data tables and analytical tools.

Coronavirus

The ONS is working to ensure that the UK has the vital information needed to respond to the impact of the coronavirus (COVID-19) pandemic on our economy and society, this includes how we measure the UK House Price Index.

Because of the impact of the coronavirus (COVID-19) pandemic on both the number and supply of housing transactions, some methodology changes have been made. The processing of new build properties has been more affected than the processing of "old build" properties, and a lower number of transactions took place in April and May 2020 than usual. So, in order to address these issues, we have had to attempt to smooth some of the estimates to reduce volatility by pooling transactions for certain months:

• March 2020 includes new build transactions from both February 2020 and March 2020 for England and Wales

• April 2020 includes all transactions from both March 2020 and April 2020 for England, Scotland and Wales

• because of the nature of the processing of the first estimate, May 2020 has not been affected

These changes might lead to larger revisions to published estimates than usual as we reduce the reliance on pooling and the supply of housing transactions return to more normal levels. Further information on how we usually process the new build properties can be found in the Quality and methodology documentation.

The ONS remains committed to providing the best and most accurate information we can, serving the public good at a time when it is needed the most. We will be working to a publication schedule, detailed in this section, that will see us publish interim releases with a view to resuming normal publication in October with the publication of the August 2020 index. This schedule will ensure we can use as many transactions as possible in each of the suspended periods following the issues caused by the coronavirus pandemic.

As per our usual revisions policy, the figures for all months are first estimates and are subject to revision in subsequent periods.

Provisional publication schedule:

• 2 September – May 2020 index

• 16 September – June 2020 index

• 7 October – July 2020 index

• 21 October – August 2020 index

The ONS has released a public statement on COVID-19 and the production of statistics. Specific queries must be directed to the Media Relations Office.

After EU withdrawal

As the UK leaves the EU, it is important that our statistics continue to be of high quality and are internationally comparable. During the transition period, those UK statistics that align with EU practice and rules will continue to do so in the same way as before 31 January 2020.

After the transition period, we will continue to produce our inflation statistics in line with the UK Statistics Authority's Code of Practice for Statistics and in accordance with internationally agreed statistical guidance and standards.

Data sources

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

Methods

The standard average house price is calculated by taking the geometric mean price in January 2015 and then recalculating it in accordance with the index change back in time and forward to the present day.

The UK HPI applies a hedonic regression model that utilises the various sources of data on property price and attributes to produce up-to-date estimates of the change in house prices in each period.

Quality

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

Extent of data coverage

The UK House Price Index (UK HPI) can provide a wide coverage of both cash and mortgage transactions and a large data source. Data are available at a local authority level as well as by property type, buyer status, funding statistics and property status.

Time lags

As sales only appear in the UK HPI once the purchases have been registered (based on completed sales rather than advertised or approved prices), 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. While changes to estimates are small at the headline level, these can be larger changes at lower geographies owing to fewer transactions being used. Caution is therefore advised when interpreting price changes in the most recent periods. Further information is provided in our revisions policy.