The latest house price data, published by the Office of National Statistics, has shown that average house prices in the UK increased by 9.6% in the year to January 2022, down from 10% in the year to December 2021.
Because of the impact of 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 recent months. 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.
The latter half of 2020 saw the UK’s average house price growth accelerating. This trend continued into 2021; the UK average house price for January 2022 was £274,000, up from £273,000 in December 2021.
The average UK house price was £274,000 in January 2022, which is £24,000 higher than in January 2021.
On a non-seasonally adjusted basis, average house prices in the UK increased by 0.4% between December 2021 and January 2022, down from 0.7% during the same period a year earlier (December 2020 and January 2021).
On a seasonally adjusted basis, average house prices in the UK increased by 0.7% between December 2021 and January 2022, following an increase of 0.6% in the previous month.
House prices by region
Annual house price rates of change, by English region, year to January 2022
The East Midlands was the region with the highest annual house price growth, with average prices increasing by 11.6% in the year to January 2022. This was up from 10.4% in December 2021 (Figure 4).
The lowest annual house price growth was in London, where average prices increased by 2.2% over the year to January 2022, down from 5.1% in December 2021.
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 £510,000 in January 2022.
The North East continued to have the lowest average house price at £151,000.