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Housing Market: Key Economic Indicators

Published Tuesday, September 13, 2016

Housing market: Data on house prices, mortgage approvals and house-building.

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House prices, as measured by the UK House Price Index, increased by 8.3% between July 2015 and July 2016. On a seasonally adjusted basis house prices decreased by 0.4% between June 2016 and July 2016.

Mortgage approvals in July 2016 were down 5.1% on the previous month and 12.4% down on a year ago. Approvals remain well down on pre-recession levels.

Housing starts increased by 2% in Q2 2016 compared to Q1 2016. Housing starts and completions have increased from the lows observed in late 2008 and early 2009 but remain below pre-recession levels.

UK House Price Index, monthly % change

On a seasonally adjusted basis, house prices in the UK decreased by 0.4% between June 2016 and July 2016. The Land Registry – who publish the House Price Index – report a 0.4% monthly increase in their headline statistics. This figure is based on data that hasn’t been seasonally adjusted.

There are regional differences in house prices. The average price is highest in London at roughly £485,000. The lowest prices are found in Northern Ireland and the North East at £123,000 and £130,000 respectively.

Mortgage approvals, UK

Bank of England data on the number of mortgages approved to finance house purchases are a leading indicator of house sales.

There were 60,912 mortgage approvals in July 2016, down 5.1% on the previous month and 12.4% compared to July 2015.

Housing starts and completions, England

There were 36,400 seasonally adjusted house building starts in England in Q2 2016, a 2% increase on the previous quarter, and 6% up on the same quarter of 2015. This is above the recent low of 17,150 in Q1 2009, but still below the 48,970 starts in Q1 2007.

There were 34,920 seasonally adjusted dwelling completions in Q2 2016, up 7% on the previous quarter, but 2% lower than during the same quarter of 2015. Completions remain below the peak of 48,440 completions in Q1 2007.

Commons Briefing papers SN02820

Author: Matthew Keep

Topics: Economic situation, Housing

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