Economy tracker: House prices

Latest news:

House prices have increased as activity in the housing market has picked up sharply at the end of 2013 following a few years of relative stagnation.

The Halifax survey said that prices had risen by 7.5% over the course of 2013, while the Nationwide said house prices were up at an annual rate of 8.4%.

The Nationwide compares prices in one month with the same month a year ago. However, the Halifax compares a three-month period with the three-month period in the previous year.

On each measure, the average price of a house also went through the £170,000 mark for the first time in five years.

However, the figures are still below the peak of the market in August 2007, when the average price was almost £200,000.

This is a UK average figure, driven by London and the south east of England. Some parts of the country have seen relatively little house price growth.

The interactive content on this page requires JavaScript

UK house prices

Year on year % change

Reset
Understanding house prices:
  • Numerous house price indexes are published, which often have different methods of calculating values and how they have changed
  • Two of the UK's biggest mortgage lenders - the Halifax, now part of Lloyds Banking Group, and the Nationwide, produce the first estimates of house prices each month - each based on their own mortgage data
  • The Land Registry is widely recognised as the most comprehensive survey in England and Wales, as it is based on the end of the buying process when a transaction is registered
  • Responsibility for calculating the government's measure of house prices has now transferred from the Department for Communities and Local Government to the Office for National Statistics.
  • Other surveys consider the confidence of estate agents, asking prices among sellers, or prices quoted on websites
Background:

BBC housing calculator

Renting example
  • Let's you see where you can afford to live - and if it would it be cheaper to rent or buy
  • Enter how many bedrooms, which end of the market and how much you want to pay each month
  • As you move the payment slider, parts of the UK light up to show you where you can afford
  • Based on pricing and rental data from residential property analysts Hometrack

The average price of a home in the UK peaked in late 2007, then plunged rapidly in 2008 before recovering in 2009 and then reaching a plateau in 2010 and 2011. By 2013 things started to increase again.

The housing market was the first area to be affected by the credit crunch as banks curtailed their lending, making it more difficult for buyers to get a mortgage.

This continued, with banks uneasy about the eurozone crisis, and meant property values failed to pick up for some time.

The whole financial crisis had started in the US housing market where banks had lent money to "sub-prime" borrowers.

When these borrowers defaulted on their mortgages in large numbers, the banks were left with bad debts - many of which had been packaged up and sold on to other financial institutions.

This infected the entire financial system and meant that banks stopped lending to each other - creating the credit crunch.

The first UK bank to be affected by the seizing up of financial markets was Northern Rock, which had to be rescued by the British government.

Get help with...

A lack of mortgages meant the market started to stagnate and the properties that did change hands went for less than they would have done a few months previously.

Some homeowners who have taken out mortgages with a high loan-to-value ratio or borrowed extra money against the value of their houses are still facing the prospect of negative equity.

However, government schemes aiming to kick-start the market appear to have had some effect, leading the debate to discussion over whether they would create an artificial house price bubble and another debt-fuelled house price boom.

More on This Story

More Business stories

RSS

BBC Business Live

  1.  
    UK PUBLIC FINANCES 09:33: Breaking News

    The UK's public sector borrowing for March was £6.7bn, significantly lower than expectations, according to the Office for National Statistics. Last year, it was £11.4bn.

     
  2.  
    EUROSTAR BOSS 09:18: BBC News Channel
    Nicolas Petrovic

    Back-to-back chief executives for Ben Thompson on the News Channel. Now it's Nicolas Petrovic from Eurostar. His company reported a 7% rise in revenue for the first quarter. He says there is rising demand for business class tickets and that's for travellers from France as well as London. But he says lots of people are unaware that you can travel on high-speed trains from London to Amsterdam or Lyon.

     
  3.  
    GERMAN MANUFACTURING 09:05:
    German factory

    Germany's economy continues to hum along according to Markit's survey of purchasing managers. The reason? "A combination of increased activity, rising new orders and further employment growth across both the manufacturing and service sectors," says Markit. However the financial information service says there's an "increasing risk of deflationary pressures" in Germany.

     
  4.  
    FLYBE EXPANSION 08:57: BBC News Channel
    Saad Hammad

    Saad Hammad, the chief executive of Flybe, is on the News Channel talking about the new routes offered by his airline. "This is a major statement of intent," he says. Mr Hammad wants the airline to be the UK's "regional airline". Half of the airline's customers are business travellers, usually based in the regions, or near City Airport, he says.

     
  5.  
    FRENCH MANUFACTURING 08:54:

    France's economic output, as measured by Markit's Purchasing Managers' Index (PMI) has fallen to 50.9 during April. That's down from 52.1 in March, and well below analysts' expectations. "The business climate looks set to remain frail," says Jack Kennedy, an economist at Markit.

     
  6.  
    MARKET UPDATE 08:40:

    The FTSE 100 is a touch higher in early trading. Royal Mail and AstraZeneca are among the biggest winners, both up almost 2%. Elsewhere in Frankfurt the Dax is a little lower and in Paris the Cac 40 is 0.3% lower. Jet engine maker Safran is down 2.6% after reporting a 3.3% rise in revenue in the first quarter.

     
  7.  
    PRIMARK US VENTURE 08:31:

    Shares in Primark owner Associated British Foods have jumped more than 9%. That follows the news that Primark is following a well-trodden, but perilous path for British retailers - the one that leads to the US.

     
  8.  
    APPLE BLOCKBUSTERS 08:25:
    Apple

    Ahead of Apple's results, due this evening, Walt Mossberg has this assessment on the company's health since Steve Jobs' death. "There have been no new game-changing products," he says. "But I think the most useful way of thinking about Apple is to see it as a movie studio. Studios release blockbuster franchise movies every few years, and then try to live off a series of sequels."

     
  9.  
    UBER INDIA Via Twitter Simon Atkinson Editor, India Business Report

    tweets: "Just interviewed @Uber_mumbai about launch. Big market but not much they can do about kind of traffic am now stuck in on way back to office"

     
  10.  
    CHINA CURRENCY 08:14:
    Chinese yuan

    China's currency has hit another 16-month low against the dollar. The yuan hit 6.2458 against the dollar and some traders are expecting it to hit 6.26 in the coming weeks. The slowing Chinese economy is among the factors blamed for the fall. There was more evidence of that today from the latest HSBC purchasing managers survey, which showed factory activity slowing for the fourth month in a row in April.

     
  11.  
    FLYBE EXPANSION 08:04:

    We're slightly bemused by a line in Flybe's announcement. "Flybe will deploy five growth aircraft for its LCY operation," it says. If you've ever been on a growth aircraft, get in touch by tweeting @BBCBusiness or emailing bizlivepage@bbc.co.uk

     
  12.  
    AUSTRALIA JETS 07:59:
    Lockheed Martin

    Australia's PM, Tony Abbott, has approved the purchase of an additional 58 new F-35 fighter jets. The deal is reportedly worth 12.4bn Australian dollars (£6.8bn). The company which makes the F-35s, Lockheed Martin, posted first quarter earnings of $933m yesterday, a 23% rise.

     
  13.  
    ARM PROFITS 07:49:
    ARM

    Cambridge-based chip designer ARM has posted first quarter results for 2014. Its pre-tax profits are up 9% on the previous year, to £97.1m. The company says 2.9 billion ARM-based chips shipped during the quarter, up 11%.

     
  14.  
    FLYBE EXPANSION 07:38:
    City airport

    Budget airline Flybe has announced a five-year deal with London's City Airport. New routes to and from Edinburgh, Belfast, Dublin, Inverness and Exeter will start in October.

     
  15.  
    PATISSERIE TO FLOAT 07:31:

    Patisserie Holdings, which owns five brands including the high-street chain Patisserie Valerie, has announced it will float on the London Stock Exchange. The company says it is seeking to raise approximately £33m.

     
  16.  
    HEADLINES
     
  17.  
    FRACKING 07:18: BBC Radio 4

    Ed Davey is also asked about fracking, and whether companies will be allowed to drill under private land without the permission of owners. Mr Davey says the government is "looking at the access rights". "The question is how those land owners are compensated and how those projects can go ahead," he adds.

     
  18.  
    GREEN ENERGY PROJECTS 07:16: BBC Radio 4

    Energy and Climate Change Secretary Ed Davey is on Today. He says the eight projects will add 2% to the average energy bill by 2020. But in return we are getting "secure, clean energy". He says the government has more renewable energy projects than they are prepared to pay for, so if any of the eight companies drop out, there are others who would take their place.

     
  19.  
    PRIMARK US VENTURE 07:12: Breaking News
    Primark

    Budget clothing retailer Primark has announced it is venturing to the US. The company, which is owned by Associated British Foods, says it will open its first American branch in Boston by the end of 2015. It plans to open further stores in the north-east of the country in 2016. Given the experience of Tesco and M&S in the US, you have to admire their optimism.

     
  20.  
    GREEN ENERGY PROJECTS 07:08: Breaking News
    Wind farm, Burbo Bank

    The Department of Energy and Climate Change has announced 8 big green energy projects. The contracts are expected to support 8,500 jobs. They include offshore wind farms and conversions of coal-powered plants to run on biomass. The projects will provide up to £12bn of private sector investment.

     
  21.  
    EXECUTIVE PAY 06:56: Radio 5 live

    Mike Amey is back on Radio 5 Live. He's discussing Vince Cable's warning over bankers' pay. He says the business secretary wants shareholders to be able to vote down pay, and good internal governance. If these measures fail to be implemented, there could be "another round of regulation coming down the tracks".

     
  22.  
    RUSSIAN TECH BOSS 06:45:
    Moscow Times

    This from the Moscow Times. The founder of Russia's biggest social networking site fled the country on Tuesday. Pavel Durov, who founded Vkontakte seven years ago, was forced out of the company on Monday for refusing to share users' personal data, according to the article. It says the social network is now controlled by billionaires Igor Sechin and Alisher Usmanov, who have close links with the Kremlin.

     
  23.  
    NICER NISA? 06:39: Radio 5 live
    NISA

    Amid the furore over the Co-op, here's a mutual that's doing quite well. NISA, which stands for National Independent Supermarkets Association and operates over 4,000 stores, has reported a 10% rise in sales. Chief executive Neil Turton tells Wake Up to Money NISA was founded in 1977 when locals "joined together to combine their buying power". Mickey asks him if NISA convenience stores are more expensive. "Price is not the big thing for consumers - it's availability," says Mr Turton.

     
  24.  
    EXECUTIVE PAY 06:33: BBC Radio 4

    The Today programme picks up on comments by Business Secretary Vince Cable. He has written to all FTSE 100 companies and urged restraint over pay. In a recorded clip on Today, Mr Cable said pay had, in the past, reached "ridiculous and dangerous levels" in the banking industry. But he said companies now have a chance "to make peace with the public". Mr Cable singled out Barclays, which has its annual meeting on Thursday.

     
  25.  
    MARKET TRENDS 06:25: Radio 5 live

    Mike Amey has more interesting markets analysis, after other pharma shares, notably Astrazeneca, also did well yesterday. "The two areas where there's the most activity at the moment are the pharmaceutical sector and things like telecoms and cable - which are both quite stable income streams, whether the economy does well and badly," he explains. When the economy starts to do better, activity starts off in the stable sectors and moves out to others, so what we are seeing is a "pretty decent recovery".

     
  26.  
    PHARMA SWAP 06:15: Radio 5 live
    Pills

    Pharma, which is business speak for pharmaceutical companies, is back in the news, with Swiss firm Novartis and GSK swapping assets yesterday. Mike Amey, managing director at Pimco, tells Wake Up to Money they are sensibly focusing on their areas of expertise and not trying and be "all things to all men". Investors seem to agree - shares in GSK went up 5% yesterday, and Novartis did well too.

     
  27.  
    SECURITISATION IS BACK 06:09: Radio 5 live

    The securitisation of debt - in which bundles of loans are sold on to investors - was one of the factors which led to the 2008 crash. But now both the ECB and Mark Carney are saying it could be a way to get money into the system again. Richard Hopkin, head of securitisation at AFME, tells Wake Up to Money the success of securitisation depends on who's in charge. He uses an analogy: "Cars don't cause accidents, it's the people driving the cars".

     
  28.  
    JAPAN TRADE 06:03: BBC World News
    Linda Yueh

    Barack Obama makes his first state visit to Japan today. He is expected to push the Trans-Pacific Partnership - an important trade deal that would eliminate trade barriers and standardise regulations. But, in a report on World Business Report, chief business correspondent Linda Yueh says Japan's rice farmers are worried it will mean the end of protection - in particular a 778% tax on imported rice.

     
  29.  
    06:02: Joe Miller Business Reporter

    Good morning. You can contact us throughout the morning by tweeting @BBCBusiness or emailing bizlivepage@bbc.co.uk

     
  30.  
    06:01: Ben Morris Business Reporter

    Good morning. We're expecting the government to announce several big green energy projects today. So stay with the Business Live page for that.

     

Features

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.