House price indices are some of the most closely watched economic indicators in the United Kingdom. This has been particularly true since early 2013 due to the stronger-than-expected growth in house prices and housing demand. This growth takes place against a background of several government initiatives to stimulate the housing market – most notably the introduction of the policy of Help to Buy, which was designed to allow those with small down payments to purchase a home.
With the extension to one of the components of the Help to Buy policy announced in the March 2014 Budget, the current and prospective trajectory of house prices continues to be an important issue. However, whilst there is no doubt that house prices are on a general upward trend, exactly how fast house prices are increasing and whether they have attained their previous peak are less clear. This briefing note is designed to shed some light on these issues.
This briefing note is accompanied by the observation House prices: what do the statistics really mean?