The UK house price inflation rate fell from 5.6% in May 2006 to 5.2% in June 2006, according to the Department for Communities and Local Government.

The DCLG took over from the Office of the Deputy Prime Minister in May and produces the ‘official’ house price index on an experimental basis, in the same way as the ODPM did. The index will undergo a quality audit during 2007 with a view to gaining accreditation as a 'National Statistic'.

Although prices rose by 0.4% between May and June, there was a larger rise of 0.8% over the same period last year, said the DCLG.

The small rise in UK prices between May and June can be attributed to small rises in average prices for semi detached houses (0.9%), and terraced houses (0.7%).

In the home countries in June, England and Scotland saw falls in inflation, while inflation rose in Wales and Northern Ireland. The inflation rate in England fell from 5.1% in May to 4.6% in June; the inflation rate in Scotland fell from 9.7% to 8.5%. In Northern Ireland the rate rose from 18.0% to 18.5%; in Wales the rate rose from 4.8% to 8.2%.

House price inflation fell in seven of the English regions and rose in two. The highest inflation rate was in Yorkshire and the Humber (6.7%) followed by London (5.8%), North East (5.5%) and South West (5.0%). Inflation rates were lower in other parts of England, in North West (4.9%), West Midlands (4.4%) and South East (4.3%). Inflation rates were lowest in East (2.8%) and East Midlands (1.9%).

House prices

Mix-adjusted average house prices in June were £198,952 in England, £155,041 in Wales, £138,672 in Scotland and £149,784 in Northern Ireland.

The English region with the highest average house price in May remains London at £279,763. The lowest average price was in the North East at £138,998.

Only the East, London, South East and the South West had average prices above the UK average.

House price inflation: type of buyer

The UK house price inflation rate for first-time buyers rose from 6.3% in May to 6.8% in June. This was due to a rise of 0.5% in prices between May and June in the properties bought by first-time buyers compared with a smaller rise of less than 0.1% over the same period last year.

The inflation rate for former owner-occupiers fell from 5.4% in May to 4.7% in June. Although there was a rise of 0.4% in prices between May and June in the properties bought by former owner-occupiers, this was less than the larger rise of 1.1% over the same period last year.

The average price paid by first time buyers across the whole of the UK was £149,215 in May, while the average price paid by former owner occupiers was £208,657.

UK annual house price inflation by type of buyer