Seasonally adjusted house prices decreased by 0.7 per cent over the month compared to a decrease of 0.9 per cent observed in January 2011. The seasonally adjusted index was 5.8 per cent below the recent peak of April 2008 and 9.5 per cent above the recent trough of April 2009.
House Price Index: Country
During the year to January average house prices decreased in Wales (-0.5 per cent), Scotland (-1.7 per cent) and Northern Ireland (-7.6 per cent). However, there was an increase of 0.4 per cent in England.
House Price Index: Region
Average house prices decreased in five of the nine English regions over the year to January 2012. The largest decrease of 3.5 per cent was observed in the North West while the smallest decrease was observed in the North East and South West (both 0.5 per cent). London registered an annual house price increase of 3.1 per cent.
Over the month to January average house prices increased in five regions including London (0.7 per cent) and the South East (2.2 per cent). Average monthly house prices fell in four regions including East Midlands (1.9 per cent) and the North East (1.5 per cent)
House Prices: Countries and Regions
Average mix-adjusted house prices in January stood at £214,852 in England, £143,441 in Wales, £158,868 in Scotland and £133,156 in Northern Ireland.
London remains the English region with the highest average house price (£349,178) whilst the North East has the lowest average price at £129,501.
In England, southern regions including London and the South East all had average prices above the UK average in January
Excluding London and the South East, the average UK price in January was £168,268, a decrease of 1.3 per cent over the year.
Type of Buyer
The average price for properties bought by first time buyers increased by 0.8 per cent to £153,233 over the year to January 2012, compared to an annual increase of 1.6 per cent in December. During January prices paid by first time buyers decreased by 0.1 per cent on average compared to an increase of 0.8 per cent in the same period last year.
There was no change in the average price of properties bought by former owner occupiers in the year to January 2012, compared to an annual decrease of 0.5 per cent in December. During January prices paid by former owner occupiers decreased by 0.8 per cent on average, compared to a decrease 1.4 per cent observed in the same period last year.
New and pre-owned dwellings
The average price for pre-owned dwellings decreased by 0.4 per cent to £205,981 over the year to January, compared to an annual decrease of 0.6 per cent in December. During January 2012 prices paid for pre-owned dwellings decreased by 0.6 per cent on average, compared to a 0.8 per cent monthly decrease during the same period last year.
The average price paid for new properties increased by 8.8 per cent to £213,390 over the year to January, compared to an annual increase of 9.5 per cent in December. During January 2012 prices paid for new properties increased by 2.3 per cent on average, compared to a monthly increase of 3.0 per cent in January last year. Month on month price changes in new build properties tend to be more volatile, reflecting low transaction levels.
Peter Hughes of estate agents, Peter Hughes, comments:
"Whatever the house price indices say from one month to the next, in this instance a 0.7% decline, the bottom line is this: transaction levels are, on average, about half of what they were in the 10-15 year period leading up to 2012.
"Transaction levels would be lower still were it not for the fact that interest rates have remained at an all-time low for the past three years. The property market is a shadow of its former self. Both supply and demand have shrunk considerably.
"The CLG house price data reinforces the regional variations in house prices. London and the South East are proving relatively resilient, while many other areas of the UK are still in retreat.
"The latest RICS data shows that sales nudged up in February but this is very likely a flash in the pan. At a deeper level, the property market remains in a state of paralysis. Some people are pinning their hopes on the Government's NewBuy scheme revitalising the market, but they're being wildly optimistic.
"Demand in the current climate is so low that even more attractive homes are struggling to sell. Therefore the compromised properties out there don't stand a chance. On the rentals side, by contrast, we have had the busiest start to the year I can remember, with rents rising by around 10% last year.
"Given the ongoing mortgage finance difficulties many people are facing, the rentals market looks set to remain strong for some time yet."
