Inflation to include housing costs
The new measure of consumer price inflation, which will initially be known as CPIH, will measure owner occupier housing costs using the rental equivalence method.
This method uses changes in rental prices to measure the costs of owning, living in and maintaining a property.
CPIH will be introduced in March 2013 at the same time as the annual Consumer Price Index and Retail Price Index basket of goods and services review.
The CPI excludes a number of items mainly related to housing. These include council tax and a range of owner-occupier housing costs such as mortgage interest payments house depreciation buildings insurance estate agents and conveyancing fees.
ONS started a consultation on the recommendation to use the rental equivalence approach to owner occupiers’ housing costs in June 2012 and will publish its full response on 13 November 2012.