The UK Home Worth Index (HPI) is a joint manufacturing by HM Land Registry (HMLR), Registers of Scotland, Land and Property Companies Northern Eire, and the Workplace for Nationwide Statistics (ONS). HMLR publishes the UK House Price Index reports on GOV.UK (at 9:30am, 15 November 2023). The experiences include full particulars, together with commentary, historic knowledge tables and analytical instruments.
It takes time for property transactions to be processed following buy completion, so transaction volumes obtainable to be used within the UK HPI construct over time. Every month, as extra transactions are processed and extra knowledge turn into obtainable for a given month, UK HPI estimates are revised.
Subsequently, warning is suggested when decoding worth adjustments in the newest intervals, since UK HPI estimates are provisional for the newest months and are revised for 12 months (till the thirteenth estimate, which is remaining), in keeping with the UK HPI revision policy.
HM Land Registry transactions
In latest intervals, the whole transaction volumes obtainable to calculate UK HPI estimates for the most recent months have been decrease than traditionally (see UK HPI Quality and Methodology Information (QMI) Section 2.2: Accuracy). This has arisen from a mixture of whole transaction volumes falling over the previous 12 months (HM Income and Customs (HMRC) has reported a 19% fall within the 12 months to September 2023) and a discount within the proportion of transactions from England and Wales, processed by HMLR, within the first estimate. The pattern for the most recent estimate is about half of traditional volumes. We and HMLR are working collectively to resolve this, together with searching for a larger stability between processing not too long ago acquired purposes and people which can be older to assist protect the standard of UK HPI statistics. Within the meantime, customers ought to be conscious that revisions could also be bigger than traditional in coming months.
HMLR has elevated the usage of automation in utility processing. Which means that preliminary transaction numbers could also be decrease than pre-coronavirus (COVID-19) pandemic volumes; nonetheless, within the medium to long run, this can result in increased volumes being processed.
Now we have quickly modified the date we obtain the transaction knowledge from HMLR. Because of this, we obtain extra transactions than these instantly seen within the revealed HMLR’s Price Paid Data datasets.
The processing of recent construct properties has been extra affected than the processing of “previous construct” properties. To handle this, we’ve got pooled new construct transactions for sure months in England and Wales since 2020. Often, new construct volumes have been pooled for six months, however we’ve got prolonged the pooling interval due to low new construct volumes to pool for eight months. Which means that:
- January 2023 contains new construct transactions from December 2022 and January 2023
- February 2023 contains new construct transactions from January and February 2023
- March 2023 contains new construct transactions from February and March 2023
- April 2023 contains new construct transactions from March and April 2023
- Could 2023 contains new construct transactions from April and Could 2023
- June 2023 contains new construct transactions from Could and June 2023
- July 2023 contains new construct transactions from June and July 2023
- August 2023 contains new construct transactions from July and August 2023
September 2023 has not been affected, as new builds are excluded from the mannequin for the primary estimate due to the character of their processing.
These adjustments would possibly result in bigger revisions to revealed estimates than traditional, as we cut back the reliance on pooling. Additional data on how we often course of the brand new construct properties could be present in HMLR’s Quality and methodology guidance.
Gross sales volumes
Gross sales are solely obtainable for inclusion within the UK HPI after property purchases have been registered (or submitted for registration in Scotland), so relies on accomplished gross sales reasonably than marketed or authorized costs. Registration takes time, so there generally is a delay earlier than transactions feed into UK HPI estimates. Estimates for the newest months are provisional and more likely to be revised as extra knowledge turn into obtainable and are integrated.
The provisional UK HPI estimates for September 2023 are primarily based on roughly 14,000 data for England, which represents roughly 18% of the provisional property transactions estimate, revealed by HM Income and Customs (HMRC). UK HPI provisional estimates for September 2023 additionally embrace roughly 6,000 data for Scotland (72% of transactions) and roughly 1,000 data for Wales (22% of transactions). This represents the variety of data which can be obtainable on the time of calculating the UK HPI and never the variety of transactions which have taken place. As time progresses, extra data will turn into obtainable for September 2023 and will probably be used to revise the UK HPI in keeping with our revealed revision coverage.
Nevertheless, it ought to be famous that there are some protection variations between the gross sales volumes used within the UK HPI dataset and the month-to-month property transactions statistics knowledge. One cause for this distinction is probably going from misclassification between residential and non-residential transactions in HMRC knowledge, as said of their Quality report, although HMRC take steps to cut back this measurement error. One more reason could possibly be that residential property transactions the place the customer or vendor is a company physique, firm or enterprise are excluded from the HMLR knowledge within the UK HPI, however included in HMRC property transaction statistics. Due to these protection variations, the UK HPI and HMRC property transactions volumes usually are not straight comparable, and gross sales volumes within the UK HPI are more likely to be decrease than transaction quantity estimates revealed by HMRC.
The principle sources of knowledge used within the UK are HMLR for England and Wales, Registers of Scotland, and HMRC’s Stamp Responsibility Land Tax knowledge for the Northern Eire HPI.
High quality and methodology
Extra data on high quality and methodology, strengths and limitations, applicable makes use of, and the way the info have been created is on the market in HMLR’s UK House Price Index guidance on GOV.UK.