House prices are falling. House prices have increased slightly. Those two statements have been in the news off and on for years lately as we have made our way from the housing boom to the economic crisis we are in today. For renters it means something to them as they struggle to gain home ownership. For those already in home ownership, you may think paying attention to house prices isn’t something that should concern you, but it does.

If you purchased a new home in June 2006, before the housing boom of late 2007 and early 2008, and it is located in either England or Wales, but not London, then your house is worth less today than it was back then when inflation is considered.

According to data supplied from LSL Property Services / Acadametrics House Price Index, UK house prices in July saw an increase of 0.1 per cent. This was slight, but an increase none the less after 4 months of straight decreases. At the end of June, the average house price throughout the UK was £220,565, which in comparison to June 2006 is just higher by 8.2 per cent. The retail price index is 12.9 per cent higher.

If you bought a home in London, your home is worth more. Prices are 20.2 per cent higher than they were in June 2006.

When people buy homes they expect them to be not only in most instances the biggest investment in their lives, but also a good investment. If you bought your home at the peak of the housing boom then your home has lost value. Everyone’s home value has a relationship to what the current housing market is doing, especially in your specific area.  It helps determine your home's current equity, which is important should you want to remortgage at some point.

So next time you see an article or news broadcast about the house price index, or the cost of buying a home in today’s market, you might want to pay attention, even if you aren’t considering moving home. The next time there is a house that sells in your neighborhood see how that compares with the value you would want to sell your house for if it were on the market. Today’s house prices affects the homeowner too.