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Home Press releasesCompany NewsHouse prices rebound, but the gap between buyer and seller expectations keeps getting wider

House prices rebound, but the gap between buyer and seller expectations keeps getting wider

To view the full Market Index Q3 2023 click here.

Patient sellers rewarded as gap between asking and sold prices narrows

The latest Property Market Index Review by London lettings and estate agent, Benham and Reeves, has revealed that house prices crept up in Q3 of last year, marking a second consecutive quarter of positive growth across both the UK and London markets. The gap between seller asking price expectation and the price paid by buyers also narrowed for the first time since 2022, suggesting that sellers are being rewarded for their patience when they do find a buyer.

The Benham and Reeves Property Market Index Review is a quarterly accumulation of house price data from the top four existing indices, providing the most comprehensive view of UK and London house price performance. It looks at where the average house price sits overall when taking into account mortgage approved house prices from Halifax and Nationwide, seller expectations via the Rightmove House Price Index, and sold prices from the UK House Price Index.

It also highlights how the market is evolving based on the gap between mortgage approved prices and asking prices, as well as asking prices and sold prices.

Current property values

Based on a geometric mean of all four existing data sets, the index from Benham and Reeves shows the average UK house price sat at £306,462 during the third quarter of 2023.

This marked a 0.1% quarterly increase, and the second consecutive quarter of positive house price growth in the UK. However, despite this growing market momentum, the market is yet to bounce back on an annual basis, with the average house price sitting -1.6% lower than it was in Q3 2022.

In London, the current average house price in Q3 2023 was £569,566 having also increased by 0.1% versus the previous quarter. As with the national picture, this is the second consecutive quarter of growth following declines in Q4 2022 (-0.8%) and Q1 2023 (-1.9%).

Despite these quarterly gains, London’s average house price also remains down on an annual basis, sitting -2.2% below Q3 2022.

Market Gap Between Mortgage Approval Price (Buyers) & Asking Price (Sellers)

In Q3 2023, the market gap between the average mortgage approved price of a buyer (£270,013) and the asking price expectation of a seller (£367,694) increased to 36.2% across the UK. This is 0.7% higher than the previous quarter, and the largest gap seen since Q3 2020.

It’s also worth noting that this average mortgage approval of £270,013 is the lowest it has been since Q1 2022.

This is the fourth consecutive quarter to see the gap increase, and suggests that while buyers have reduced the amount they’re willing to borrow during a period of high interest rates, sellers aren’t reducing their asking price expectations at the same rate.

In London, the gap between buyer (£514,325) and seller (£678,176) is 31.9% which actually marks a quarterly narrowing of the gap by almost -1% following five consecutive quarters of widening. This suggests that London sellers are more willing to meet in the middle in order to secure a buyer.

Market Gap Between Asking Price (Sellers) & Sold Price (Buyers)

The latest index by Benham and Reeves shows that the gap between the average UK asking price and the average sold price is, perhaps surprisingly, starting to close.

Across the UK, the average sold price in Q3 2023 stood at £289,907, -21.2% below the average asking price of £367,694. While this remains a significant gap, it is the first time the gap has narrowed rather than expanded since Q4 2022.

In London, the gap between asking price and sold price sits at -21.9% having also narrowed for the first time in a year.

This suggests that while buyers may be initially borrowing less, they are willing to improve their offer for the right home, while stubborn sellers are having to stomach a smaller reduction in asking price when they do find a buyer in a proceedable position.

Director of Benham and Reeves, Marc von Grundherr, commented:

“Our latest market analysis suggests that while buyers have certainly been treading with more caution and borrowing less in the face of higher interest rates, those who are entering the market are still paying a good price for their desired homes.

In fact, across both London and the wider UK market, the gap between asking prices and sold prices narrowed for the first time during the third quarter, demonstrating that while patience is certainly a virtue, it remains a great time to sell.

With interest rates expected to ease off in 2024, we should see buyers gaining more confidence and coming to market with slightly deeper pockets which should go some way to closing the gap even further.

Once again, the house price crash that so many experts said was an inevitability appears to have been averted and we fully expect the market to go from strength to strength as we move into 2024.

Benham and Reeves House Price Index
UK
Year Quarter Benhams and Reeves Aggregated Average House Price Quarterly Change
2018 Q1 £245,074
Q2 £248,245 1.3%
Q3 £250,244 0.8%
Q4 £248,513 -0.7%
2019 Q1 £247,463 -0.4%
Q2 £251,682 1.7%
Q3 £252,487 0.3%
Q4 £251,914 -0.2%
2020 Q1 £253,983 0.8%
Q2 £254,839 0.3%
Q3 £261,757 2.7%
Q4 £266,981 2.0%
2021 Q1 £268,398 0.5%
Q2 £277,353 3.3%
Q3 £282,390 1.8%
Q4 £288,210 2.1%
2022 Q1 £294,886 2.3%
Q2 £305,846 3.7%
Q3 £311,293 1.8%
Q4 £308,186 -1.0%
2023 Q1 £303,433 -1.5%
Q2 £306,025 0.9%
Q3 £306,025 0.1%
Benham and Reeves House Price Index
London
Year Quarter Benhams and Reeves Aggregated Average House Price Quarterly Change
2018 Q1 £519,238
Q2 £520,412 0.2%
Q3 £517,059 -0.6%
Q4 £514,976 -0.4%
2019 Q1 £504,731 -2.0%
Q2 £512,193 1.5%
Q3 £513,180 0.2%
Q4 £511,166 -0.4%
2020 Q1 £516,489 1.0%
Q2 £521,842 1.0%
Q3 £530,383 1.6%
Q4 £531,778 0.3%
2021 Q1 £528,680 -0.6%
Q2 £544,987 3.1%
Q3 £545,230 0.0%
Q4 £550,215 0.9%
2022 Q1 £559,285 1.6%
Q2 £578,484 3.4%
Q3 £582,151 0.6%
Q4 £577,618 -0.8%
2023 Q1 £566,737 -1.9%
Q2 £568,776 0.4%
Q3 £569,566 0.1%
UK – Mortgage to Asking Price House Price Gap
Year Quarter Mortgage Approvals Price Difference Asking Price
2018 Q1 £218,231 37.8% £300,684
Q2 £219,116 40.4% £307,745
Q3 £221,959 37.4% £305,060
Q4 £220,522 37.1% £302,239
2019 Q1 £221,578 35.6% £300,481
Q2 £225,987 36.2% £307,691
Q3 £224,490 36.5% £306,316
Q4 £225,188 34.6% £303,169
2020 Q1 £228,344 35.6% £309,611
Q2 £228,511 36.5% £311,950
Q3 £234,497 36.4% £319,919
Q4 £240,495 33.8% £321,833
2021 Q1 £241,628 32.0% £318,901
Q2 £251,031 32.4% £332,478
Q3 £255,474 32.3% £338,093
Q4 £262,639 30.3% £342,338
2022 Q1 £269,818 29.0% £348,129
Q2 £279,592 30.7% £365,405
Q3 £282,809 30.0% £367,634
Q4 £275,397 32.8% £365,765
2023 Q1 £271,099 34.1% £363,416
Q2 £273,431 35.6% £370,651
Q3 £270,013 36.2% £367,694
London – Mortgage to Asking Price House Price Gap
Year Quarter Mortgage Approvals Price Difference Asking Price
2018 Q1 £473,776 30.8% £619,905
Q2 £468,845 34.0% £628,174
Q3 £468,544 31.2% £614,537
Q4 £466,988 31.5% £614,044
2019 Q1 £455,594 32.8% £605,178
Q2 £465,722 32.7% £618,232
Q3 £460,686 33.1% £612,967
Q4 £458,363 32.9% £609,315
2020 Q1 £460,266 36.2% £626,687
Q2 £475,448 31.9% £627,339
Q3 £480,857 32.0% £634,773
Q4 £486,562 29.2% £628,648
2021 Q1 £482,576 27.8% £616,808
Q2 £509,935 25.9% £641,961
Q3 £500,980 27.7% £639,700
Q4 £507,230 27.2% £645,214
2022 Q1 £518,333 26.0% £653,333
Q2 £540,399 26.3% £682,759
Q3 £534,545 27.4% £681,232
Q4 £528,000 29.1% £681,419
2023 Q1 £511,293 32.4% £676,707
Q2 £516,923 32.8% £686,271
Q3 £514,325 31.9% £678,176
UK – Asking Price to Sold Price House Price Gap
Year Quarter Asking Price Difference Sold Price
2018 Q1 £300,684 -25.4% £224,319
Q2 £307,745 -26.3% £226,869
Q3 £305,060 -24.1% £231,438
Q4 £302,239 -23.8% £230,274
2019 Q1 £300,481 -24.3% £227,608
Q2 £307,691 -25.5% £229,276
Q3 £306,316 -23.6% £234,074
Q4 £303,169 -22.8% £234,167
2020 Q1 £309,611 -25.2% £231,743
Q2 £311,950 -25.6% £232,169
Q3 £319,919 -25.3% £239,067
Q4 £321,833 -23.6% £245,868
2021 Q1 £318,901 -21.3% £250,920
Q2 £332,478 -23.1% £255,628
Q3 £338,093 -22.9% £260,715
Q4 £342,338 -22.2% £266,264
2022 Q1 £348,129 -21.6% £272,992
Q2 £365,405 -23.4% £280,032
Q3 £367,634 -21.10% £290,134
Q4 £365,765 -20.60% £290,587
2023 Q1 £363,416 -22.00% £283,567
Q2 £370,651 -23.70% £282,786
Q3 £367,694 -21.20% £289,907
London – Asking Price to Sold Price House Price Gap
Year Quarter Asking Price Difference Sold Price
2018 Q1 £619,905 -23.1% £476,653
Q2 £628,174 -23.8% £478,555
Q3 £614,537 -21.9% £480,090
Q4 £614,044 -22.4% £476,273
2019 Q1 £605,178 -22.9% £466,356
Q2 £618,232 -24.5% £466,683
Q3 £612,967 -21.9% £478,594
Q4 £609,315 -21.5% £478,227
2020 Q1 £626,687 -23.8% £477,665
Q2 £627,339 -24.1% £476,443
Q3 £634,773 -23.0% £488,805
Q4 £628,648 -21.8% £491,637
2021 Q1 £616,808 -19.5% £496,435
Q2 £641,961 -23.0% £494,465
Q3 £639,700 -20.9% £505,757
Q4 £645,214 -21.1% £508,965
2022 Q1 £653,333 -20.9% £516,601
Q2 £682,759 -23.2% £524,677
Q3 £681,232 -20.50% £541,786
Q4 £681,419 £535,640 -21.40%
2023 Q1 £676,707 -22.30% £526,108
Q2 £686,271 -24.40% £518,684
Q3 £678,176 -21.90% £529,727

The Benham and Reeves Property Market Index Review gauges the health of the UK and London property markets based on data from the top four existing indices. It looks at where the average house price sits overall when taking into account mortgage approved house prices from Halifax and Nationwide, seller expectations via the Rightmove House Price Index, and sold prices from the UK House Price Index.

It also highlights how the gap has changed between buyers and seller expectation, as well as asking price and actual sales price, on a quarterly basis across London and the UK.
Land Registry, Halifax HPI, Nationwide HPI, Rightmove HPI

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About the Author

Established in 1958, Benham and Reeves is one of London’s oldest, independently owned property lettings and sales agents. With specialism in residential sales, corporate lettings and property management in prime areas of London, the company operates from 21 prominently located branches and 15 international offices.

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