Notes, definitions and methodology for housing market and house prices data

For definition of a dwelling, type of dwelling, tenure and general definition of a household see Definition of general housing terms .

House Prices

Communities and Local Government House Price Index

The mix-adjusted house price index is a weighted average of prices for a standard mix of dwellings. From 1969 to 1992 the index reflected dwellings mortgaged by building societies. From 1983 the standard mix of dwellings was updated annually to reflect the types of dwellings purchased during the previous three years.

In the early 1990s many of the larger building societies converted to banks and an index limited to building society mortgages could no longer be assumed to be representative of all house purchases. So from 1993 the index was extended to include both banks and building societies and was re-named the All Lenders index. It was based on a five per cent sample survey of all lenders.

Since 2001 a number of lenders (but not all) submitted details of all their completions instead of a five per cent sample. Data from 2003 through to August 2005 reflects the results of this enlarged sample. From September 2005, the survey became 100 per cent for those lenders taking part and changed to take data from the Financial Services Authority data collection.

Its name was changed to the Regulated Mortgage Survey (RMS). Data covering 1993 to 2002 are based on a sample size ranging from 26,000 to 36,000 per annum. From mid-2003 to August 2005 the survey covered about 25,000 mortgage completions per month. The RMS is larger and by the end of 2005 was covering about 40,000 mortgage completions a month. During 2006 about 50,000 mortgage completions a month were covered.

During 2007 there were around 50,000 records per month supplied by about 60 lenders. In the 6 months to May 2010 there were 32 lenders on average contributing to the house price index, providing around 23,000 records per month

The questionnaire on which the survey is based has been revised from time to time. For example, in 1982 when the question on the previous tenure of borrowers was extended to identify sitting tenants. The present method of analysis was introduced in the second quarter of 1968 and most of the detailed series now published have their origins in this period, although the mix-adjustment was modernised in 2003 when the monthly series was introduced.

Regulated Mortgage Survey

The Regulated Mortgage Survey (RMS) is a monthly Communities and Local Government and Council of Mortgage Lenders survey, which collects house price information from mortgage lenders for properties that reached completion during the month and for which they provided the mortgage.

Other data collected includes locality, type of dwelling, size, whether or not the property is new and whether the buyer was a first time buyer or not.

The data are used primarily to determine a monthly mix-adjusted house price index - but also provides valuable additional information on the housing market.

First time buyer/former owner occupier

In the statistics presented a former owner occupier household is a household that was in owner occupation immediately prior to making a house purchase.
First time buyers, in our statistics from the Regulated Mortgage Survey, are households that move into owner occupation without having to sell a property. Therefore numbers will include some buyers who have previously owned a property before, but are not in owner occupation at the time of purchase. Estimates from the CLG Survey of English Housing suggest that around 20 per cent of stated first time buyers may fall into this category. The other 80 per cent will be "genuine" first time buyers (i.e. those who have never owned a property before).

Mix-adjusted house prices

The house price index is mix-adjusted to allow for the fact that different houses are sold in different periods. House prices are modeled using a combination of factors that produce a model containing a large number of "cells" (variable combinations such as first time buyer, old dwelling, and detached house in London). Once the monthly price estimates for all cells have been determined by the model, they are combined with their appropriate weights to produce that month's mix-adjusted average prices for all the required output categories. Weights are calculated once a year based on the relative numbers of transactions during the previous three years, given by the Land Registry data. The index is an annual chain-linked Laspeyres-type index, like the Retail Prices Index as published by the Office for National Statistics.

New dwellings

New dwellings are defined as those that never previously existed. So conversions of buildings (e.g. out houses, barns) into living accommodation are not counted as "new" dwellings.

Land Registry

Her Majesty's Land Registry (Land Registry) was established in 1862. It is a non-ministerial government department that collects data on transactions in property and land in England and Wales. The Land Registry data on residential house price transactions feeds into some of our live tables. This dataset only includes residential transactions at full market value. This means it excludes:

1. All commercial transactions

2. Transfer, conveyances, assignments or lease at a premium with nominal rent which are:

Right to buy sales at a discount
subject to a lease
subject to an existing mortgage
to effect the sale of a share in a property
by way of a gift
by way of exchange
under a Compulsory Purchase Order
under a court order
to Trustees
Vesting Deeds
Transmissions or Assents
of more than one property
leases for seven years or less

Mortgage Lending

Income

The income of borrowers is the total declared income on which the mortgage is based. It may overstate/understate the borrowers' true income and may include more than one income.

Buy to let mortgage

A buy to let mortgage is a mortgage vehicle that is used by a borrower to obtain money to buy a property in the private sector with the purpose of letting the property to a tenant.

Mortgage Payments

Mortgage payments results are analysed by Communities and Local Government from data collected in the Family Resources Survey (FRS), a survey commissioned by the Department for Work and Pensions. The published data are for England, as for the SEH data. Payments include both interest and the repayment of capital, if there was any. Insurance premiums relating to endowment mortgages are included, as are similar payments for pension or PEP mortgages and the like.

Care is needed in interpreting the figures as some are based on small samples and are therefore subject to substantial sampling error. The figures are shown grossed, using the Department for Work and Pensions own grossing factors.

Further information is published by the Department for Work and Pensions in FRS annual reports. Data from the Expenditure and Food Survey (EFS) also continue to be published annually in a report entitled Family Spending. Unpublished FRS and EFS data on incomes, rents and mortgage payments can be obtained from the Communities and Local Government, Housing Analysis and Surveys Division, Zone 4/J2, Eland House, London SW1E 5DU.