Latest ONS House Price Index for May 2022 published

The latest ONS House Price Index for May 2022 has been published, covering the figures for house sales up to the end of May 2022.

1. Main points

• UK average house prices increased by 12.8% over the year to May 2022, up from 11.9% in April 2022.
• The average UK house price was £283,000 in May 2022, which is £32,000 higher than this time last year.
• Average house prices increased over the year in England to £302,000 (13.1%), in Wales to £212,000 (14.4%), in Scotland to £188,000 (11.2%) and in Northern Ireland to £165,000 (10.4%).
• London continues to be the region with the lowest annual growth at 8.2%.

2. UK house prices

UK average house prices increased by 12.8% over the year to May 2022

The latest house price data published on GOV.UK by HM Land Registry (HMLR) for May 2022 show that average house prices in the UK increased by 12.8% in the year to May 2022, up from 11.9% in the year to April 2022.

Because of the impact of the coronavirus (COVID-19) pandemic on both the number and supply of housing transactions, we might see larger revisions to the published UK House Price Index (HPI) estimates than usual.

There may be increased volatility in this month’s estimates, particularly at the lower geographical levels where transaction volumes are smaller. We are looking at options to improve this, including working with data suppliers.

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

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.

Notes:

• Not seasonally adjusted.
• HMLR’s UK House Price Index (HPI) release on GOV.UK is available to download.

The latter half of 2020 saw the UK’s average house price growth accelerating. This trend continued into 2021, and house price growth has remained strong since the start of 2022; the UK average house price for May 2022 was £283,000, up from £280,000 in April 2022.

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.

As the tax breaks were originally due to conclude at the end of March 2021, it is likely that March’s average house prices were slightly inflated as buyers rushed to ensure their house purchases were scheduled to complete ahead of this deadline. This effect was then further exaggerated in June 2021 in line with the extension to the holiday on taxes paid on property purchases in England, Wales and Northern Ireland. This could be seen again in September 2021 when the last of the tax holidays came to an end in England. An increase in prices since then has resulted in a record average house price level in the UK of £283,000 in May 2022. This is the seventh consecutive month that average UK house prices have increased. While the annual growth rate of 12.8% in May 2022 is the highest since June 2021, it is worth noting that this may be somewhat attributable to the slow growth experienced in early 2021, as well as the strength seen across recent months.

The provisional seasonally adjusted estimate of UK residential transactions in May 2022 was 109,210, as shown in the Monthly property transactions statistics published by HM Revenue and Customs (HMRC). This is 5.1% lower than May 2021 and 1.3% higher than April 2022.

Notes:

• Not seasonally adjusted.
• HMLR’s UK House Price Index (HPI) release on GOV.UK is available to download.

The average UK house price was £283,000 in May 2022; this is £32,000 higher than in May 2021.

On a non-seasonally adjusted basis, average house prices in the UK increased by 1.2% between April and May 2022 compared with an increase of 0.4% during the same period a year earlier (April and May 2021).

On a seasonally adjusted basis, average house prices in the UK increased by 0.9% between April and May 2022, following an increase of 0.4% in the previous month.

More about economy, business and jobs:

• All ONS analysis, summarised in our economy, business and jobs roundup.
• Explore the latest trends in employment, prices and trade in our economic dashboard.
• View all economic data.

3. House prices by country

Notes:

• Not seasonally adjusted.
• HMLR’s UK House Price Index (HPI) release on GOV.UK is available to download.
• Northern Ireland (NI) data are only available on a quarterly basis; Northern Ireland data will be copied forward until next quarter’s data are available, which will be in the June 2022 bulletin released on 17 August 2022.
• Further information on the Northern Ireland HPI publications and future release schedules can be viewed.

The average house price in Wales increased by 14.4% over the year to May 2022, down from an increase of 15.4% in the year to April 2022. The average house price in Wales was at a record level of £212,000 in May 2022.

The average house price in England increased by 13.1% over the year to May 2022, up from an increase of 11.6% in the year to April 2022. The average house price in England was at a record level of £302,000 in May 2022.

The average house price in Scotland increased by 11.2% over the year to May 2022, down from an increase of 14.7% in the year to April 2022. The average house price in Scotland was at a record level of £188,000 in May 2022.

The average house price in Northern Ireland increased by 10.4% over the year to Quarter 1 (Jan to Mar) 2022. Northern Ireland remains the cheapest UK country in which to purchase a property, with the average house price at £165,000.

4. House prices by region

Notes:

• Not seasonally adjusted.
• HMLR’s UK House Price Index (HPI) release on GOV.UK is available to download.

The South West was the region with the highest annual house price growth, with average prices increasing by 16.9% in the year to May 2022. This was up from a growth rate of 14.7% in April 2022.

The lowest annual house price growth was in London, where average prices increased by 8.2% over the year to May 2022, up from 6.9% in April 2022.

Despite being the region with the lowest annual growth, London’s average house prices remain the most expensive of any region in the UK, with an average price of £526,000 in May 2022.

The North East continued to have the lowest average house price at £154,000.

Notes:

• Data at the local authority level and other breakdowns can be found in HMLR’s UK House Price Index (HPI) release on GOV.UK.
• Because of the impact of the coronavirus (COVID-19) pandemic on both the number and supply of housing transactions, we might see larger revisions to the published UK HPI estimates than usual, particularly at the lower geographical levels where transaction volumes are smaller.

5. House Price Index data

• UK House Price Index
  Dataset | Released 20 July 2022
  Monthly house price movements, including average price by property type, sales and cash mortgage sales, as well as information on first-time buyers, new builds and former owner occupiers. Data are collected by HM Land Registry and published on GOV.UK.
• House price data: quarterly tables
  Dataset | Released 18 May 2022
  Quarterly house price data based on a sub-sample of the Regulated Mortgage Survey.
• House price data: annual tables 20 to 39
  Dataset | Released 20 July 2022
  Annual house price data based on a sub-sample of the Regulated Mortgage Survey.

Kindly shared by Office for National Statistics (ONS)

Main photo courtesy of Pixabay