UK House Prices

House Prices in the UK are relevant to Financial Independence as their valuations have gone up pretty high in recent times making property a potential risk or opportunity. So what's the opportunity? If you want or need to buy a property, or invest, preferably you want to do that when prices are depressed, not when they are high. You want to buy or invest in a 'buyers' market.

What's the risk? Not many economists would argue against property being an "inflated asset class". Nigh on 2 decades worth of ZIRP (Zero Interest Rate Policy) have inflated mortgage valuations for property of this unusually low base from historic standards. 

With interest rates 'normalising' in recent times it would be perfectly logical to expect an adjustment in property valuations to the downside to reflect high rates. So, as with our 'Financial Crash' page, we want to track the main indexes and indicators to see if that's materialising in any way shape or form.

But first things first, a crash in house prices is likely to be preceded by a rise in unemployment and negative Gross Domestic Product (GDP) figures. The UK government ONS homepage gives us a snapshot of these headline figures.

• ONS Homepage  (Click on the "Data" links on this page to see the longer term graphs for GDP, Inflation and Unemployment.)

• UK GDP (trading economics)

• UK Inflation Rate (trading economics)

• UK Unemployment Rate (trading economics)

The EY ITEM Club is a leading UK economic forecasting group producing quarterly UK forecasts. The ONS Dashboard page below provides up to date graphs for the UK economy. We are only interested in where the graphs are heading down

• EY ITEM CLUB

The UK Office for Budget Responsibility House Price Forecast will tell us where they think house prices are headed: -

• OBR Forecast

One metric that is not based on house prices but is still a useful gauge of property market health is 'mortgage approvals'. The fabulous website 'Trading economics' collates these every month...

• UK Mortgage Approvals

House Price Aggregators

These are just websites that pull together data from the main house price indexes below. I usually start off with these to get a bird's eye view. 

Headline UK House Price Indices

The HPC isn't one of the house price indexes itself, but it does provide a very nice bird's eye view of the main indexes in one snapshot table. (Update Nov 2024: it look like they have 'gone on holiday' but as it was such a staple for the UK house price data scene for such a long time the links are below.)

• House Price Crash (HPC) UK - Snapshot (Just take a look at the headline table on this page)

• House Price Crash (HPC) UK - Graphs (...provides some graphs so we can see a change over time.)

• Nationwide Monthly House Prices (HPC)

• Nationwide Average House Prices Adjusted for Inflation: 'Real House Prices' (HPC)

• Rightmove London Average House Prices (HPC)

• Trading Economics HPI

The Main UK House Price IndeXes

The main house price indexes for the UK are listed below, but, if you prefer to watch and listen, I will be giving a running commentary on my YouTube channel each month so you can tune into that if you wish.

This UK government webpage describes the main UK HPI's that I cover below so if you're really keen you can dig a little deeper there, but also I have given a basic description of each below.

I will start with what I consider to be the two main indexes to watch and then progress down in importance in terms of telling what is happening and where we could be heading, although they all have something to add and are all worth watching to gain an overall picture.

Hometrack/Zoopla

Hometrack is the main provider of house price data in the UK. The big banks and mortgage lenders use Hometrack for house price data when lending out their mortgages. They also provide some forecasting so they are well worth listening to. Click both button links on the homepage. One gives a very nice view of UK cities and what each cities HPI (or decrease is). This data is hard to find elsewhere.

• Hometrack

Hometrack was actually acquired by Zoopla back in 2015. So Zoopla now provides authoritative House price data and summaries:-

• Zoopla

e.surv Acadata HPI

This index is based on Land Registry data, but gives us the emerging percentage monthly change to the average house price for both the current month and the month ahead. Hover over the UK regions to see the 'change' fields: -

• Acadata HPI

• Acadata - Local Markets (click on London and see if the blue negative YoY regions are expanding from the center of London as in the last UK crash)

The UK Land Registry & The Office for National Statistics (ONS)

The Land Registry in the UK collects sold price data for all property transaction in the UK. So while the two main mortgage lender indexes below are only for properties bought with a mortgage, the Land Registry adds in properties bought without a mortgage. The ONS site data is based in the Land Registry but possible with some differences in the statistical methods use to derive the Index.

• The UK Land Registry HPI

• The Office for National Statistics (ONS) HPI

The ONS data is the most comprehensive when it comes to the UK housing market, as it includes both cash and mortgage transactions, unlike the Nationwide and Halifax. However, the official data has a significant lag as it measures completed sales, which were likely agreed months ago.

A more timely sentiment indicator comes from the Royal Institution of Chartered Surveyors (see RICS below).

The Biggest Mortgage Lenders in the UK (Halifax HPI and Nationwide HPI)

The Nationwide reports link below defaults to the National HPI reports and gives a nice summary of the latest month and the past few months. You can also drill into Regional HPI here if you're interested in different areas in the UK. The Nationwide charts link gives us some nice visuals to help understand the HPI data. 

There will be some differences between the Nationwide HPI and the Halifax HPI in terms of statistical methods used for seasonality etc but they should be broadly the same.

• Nationwide HPI reports

• Nationwide HPI charts

• Halifax HPI

Rightmove

The main Rightmove HPI gives us an insight into asking prices and how they are changing but the second link below links to a very useful sold prices tool where you can enter a postcode, town or region and get a very nice view of the change in the number of sold properties over time and well as the corresponding average sold price in each month. Useful if you are researching a particular area. (Remember, whilst the HPI's above may show us the overall picture, the UK is essentially a large collection of 'micro' markets each with their own characteristics and economies.)

The Rightmove HPI

The Rightmove Sold Prices Tool

Others

If you're really keen, this YouTube channel looks at leading indicators and carries out some statistical analysis.

The RICS Surveyors produce a monthly report. There probably isn't anyone more 'hands-on' when it comes to property valuation than the guys over at RICS.

Bank of England Mortgage Approvals (filter by 'Money & Credit to get the latest Mortgage Debt and Approvals). Mortgage approvals is leading indicator as property prices following mortgage approvals down.

Finally, the direction of the main UK builders/developers and estate agents' share prices is another clue as to where we might be heading. Clever share price analysts in the property/building sector are constantly assessing the future prospects of these companies and should give us another leading indicator for the property sector...

• BERKELEY GROUP HOLDINGS PLC 

• PERSIMMON PLC

• FOXTONS GROUP PLC

• SAVILLS

If you are actually buying a property check out this page on Money Saving Expert page to find out everything from local sold prices to local area research.