Homeowners will see an increase in the prices of their property
Homeowners in Britain might be sitting on a bigger profit, regarding an increase in the value of their properties, than first thought, according to new figures revealed this week.
A new official house-price index by the Office for National Statistics shows that values were rising at an annual average of 6.1 per cent between 2003 and 2011 – which is considerably more than the Land Registry’s estimate of 4.6 per cent.
According to the new index, the average house price in December 2011 in England and Wales was £185,000 compared with £157,000 on Land Registry data and £222,000 for England alone on the existing ONS series.
The ONS will publish more recent data in June.
The index, which will replace the existing ONS and Land Registry series, also suggests house prices rose quicker than stated in widely used surveys from mortgage lenders – Halifax and Nationwide.
House prices are so important because houses are often people’s largest single asset and annual increases in its value can sometimes even exceed their annual salary.
In 2014, regulators placed curbs on mortgage lending to discourage risky borrowing, and on Tuesday the Bank of England recommended that lenders tighten their credit checks on loans to landlords.
Whether the arrival of the official house price index from June will make the housing market any more comprehensible remains to be seen, but industry experts have been calling for the index now for many years.