London lettings and estate agent, Benham and Reeves, has released its latest Market Index Review providing the most comprehensive view of UK and London house price performance.
The Benham and Reeves Market Index Review is 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.
Current property values
Based on a geometric mean of all four existing data sets, Benham and Reeves puts the current average UK house price at ÂŁ296,406 for the first quarter of 2022, up 2.6% on the previous quarter and 10.4% annually. In London, the current average is ÂŁ562,146 having climbed 1.8% quarter to quarter and 6.3% in Q1 on 2021.
Market Gap Between Mortgage Approval Price (Buyers) & Asking Price (Sellers)
Despite a hat trick of base rate increases from the Bank of England during the final quarter of 2021 and the first of 2022, mortgage approved house prices via Nationwide and Halifax climbed by 2.7% on a quarterly basis.
At the same time, the average asking prices also climbed for the fourth consecutive quarter, although at 1.7%, this rate of growth was more muted.
This means that the gap between what buyers are prepared to pay (ÂŁ269,769) and what sellers are hoping to secure (ÂŁ348,129) has reduced to just 29%, the smallest gap recorded since Benham and Reeves began their house price index in 2018.
In London, the average mortgage approval price also increased by 2.2% on a quarterly basis, with asking prices up 1.3% on the previous quarter.
This means that the capital’s sellers remained less over expectant compared to the wider UK market, with the gap between the average mortgage approval price (£518,333)and the average asking price (£653,333) sitting at just 26%.
However, as with the UK overall, this is the smallest gap between buyer and seller expectations recorded in the London market since the Benham and Reeves Index began in 2018.
Market Gap Between Asking Price (Sellers) & Sold Price (Buyers)
During Q1 2022, the gap between the asking price expectations of UK homeowners and the price paid by the nation’s buyers fell to its lowest on record. With the average buyer paying £277,287, those selling their property were having to reduce their asking price (£348.129) by just -20.3% in order to secure a sale. This is undoubtedly due to the severe lack of stock available on the market causing many buyers to offer above and beyond what they may have otherwise, simply to secure themselves a property.
Across London, the gap between the average sold price (ÂŁ524,570) and the average asking price (ÂŁ653,333) fell to just -19.7% during the first quarter of 2022. This was also the smallest gap between seller expectation and buyer intent recorded by Benham and Reeves since 2018 bar just one. During the first quarter of 2021, this market gap had closed to 19.5%, the only time it has been smaller than it currently is.
Director of Benham and Reeves, Marc von Grundherr, commented:
“Despite a string of interest rate hikes, UK homebuyers continue to make hay while the sun shines, with mortgage approved house prices climbing yet again in 2022.
At the same time, asking prices have also increased but they haven’t done so with the same gusto. As a result, this continued optimism from the nation’s buyers means that the gap between what they are borrowing and the notoriously ambitious asking price expectations of UK sellers is now at its smallest since we began our records back in 2018.
But while buyers continue to swamp the market at mass, the challenge facing them is a severe lack of available stock and this is having a notable influence on the market reality gap between asking prices and sold prices.
Sellers will always overprice when entering the market in order to leave a little room to do the dance during the negotiation stage. Although they continue to do so, they are finding that buyers are willing to come up that bit more than they previously have in order to secure a property.
This has caused the gap between asking prices and sold prices to narrow to its lowest on record.”
Benham and Reeves House Price Index
UK
Year
Quarter
Average House Price
Quarterly Change
2018
Q1
ÂŁ245,074
–
Q2
ÂŁ248,245
1.3%
Q3
ÂŁ250,244
0.8%
Q4
ÂŁ248,513
-0.7%
2019
Q1
ÂŁ247,463
-0.4%
Q2
ÂŁ251,682
1.7%
Q3
ÂŁ252,487
0.3%
Q4
ÂŁ251,914
-0.2%
2020
Q1
ÂŁ253,983
0.8%
Q2
ÂŁ254,839
0.3%
Q3
ÂŁ261,757
2.7%
Q4
ÂŁ266,981
2.0%
2021
Q1
ÂŁ268,398
0.5%
Q2
ÂŁ277,454
3.4%
Q3
ÂŁ282,679
1.9%
Q4
ÂŁ289,019
2.2%
2022
Q1
ÂŁ296,406
2.6%
Benham and Reeves House Price Index
London
Year
Quarter
Average House Price
Quarterly Change
2018
Q1
ÂŁ519,238
–
Q2
ÂŁ520,412
0.2%
Q3
ÂŁ517,059
-0.6%
Q4
ÂŁ514,976
-0.4%
2019
Q1
ÂŁ504,731
-2.0%
Q2
ÂŁ512,193
1.5%
Q3
ÂŁ513,180
0.2%
Q4
ÂŁ511,166
-0.4%
2020
Q1
ÂŁ516,489
1.0%
Q2
ÂŁ521,842
1.0%
Q3
ÂŁ530,383
1.6%
Q4
ÂŁ531,778
0.3%
2021
Q1
ÂŁ528,680
-0.6%
Q2
ÂŁ545,004
3.1%
Q3
ÂŁ546,093
0.2%
Q4
ÂŁ552,015
1.1%
2022
Q1
ÂŁ562,146
1.8%
UK
Year
Quarter
Mortgage Approvals Price
< Difference >
Asking Price
< Difference >
Sold Price
2018
Q1
ÂŁ218,231
37.8%
ÂŁ300,684
-25.4%
ÂŁ224,319
Q2
ÂŁ219,116
40.4%
ÂŁ307,745
-26.3%
ÂŁ226,869
Q3
ÂŁ221,959
37.4%
ÂŁ305,060
-24.1%
ÂŁ231,438
Q4
ÂŁ220,522
37.1%
ÂŁ302,239
-23.8%
ÂŁ230,274
2019
Q1
ÂŁ221,578
35.6%
ÂŁ300,481
-24.3%
ÂŁ227,608
Q2
ÂŁ225,987
36.2%
ÂŁ307,691
-25.5%
ÂŁ229,276
Q3
ÂŁ224,490
36.5%
ÂŁ306,321
-23.6%
ÂŁ234,074
Q4
ÂŁ225,188
34.6%
ÂŁ303,182
-22.8%
ÂŁ234,167
2020
Q1
ÂŁ228,344
35.6%
ÂŁ309,611
-25.2%
ÂŁ231,743
Q2
ÂŁ228,511
36.5%
ÂŁ311,950
-25.6%
ÂŁ232,169
Q3
ÂŁ234,497
36.4%
ÂŁ319,919
-25.3%
ÂŁ239,067
Q4
ÂŁ240,495
33.8%
ÂŁ321,833
-23.6%
ÂŁ245,868
2021
Q1
ÂŁ241,628
32.0%
ÂŁ318,901
-21.3%
ÂŁ250,920
Q2
ÂŁ251,031
32.4%
ÂŁ332,478
-23.0%
ÂŁ255,906
Q3
ÂŁ255,474
32.3%
ÂŁ338,093
-22.7%
ÂŁ261,515
Q4
ÂŁ262,639
30.3%
ÂŁ342,338
-21.6%
ÂŁ268,512
2022
Q1
ÂŁ269,769
29.0%
ÂŁ348,129
-20.3%
ÂŁ277,287
London
Year
Quarter
Mortgage Approvals Price (Nationwide – London)
< Difference >
Asking Price
< Difference >
Sold Price
2018
Q1
ÂŁ473,776
30.8%
ÂŁ619,905
-23.1%
ÂŁ476,653
Q2
ÂŁ468,845
34.0%
ÂŁ628,174
-23.8%
ÂŁ478,555
Q3
ÂŁ468,544
31.2%
ÂŁ614,537
-21.9%
ÂŁ480,090
Q4
ÂŁ466,988
31.5%
ÂŁ614,044
-22.4%
ÂŁ476,273
2019
Q1
ÂŁ455,594
32.8%
ÂŁ605,178
-22.9%
ÂŁ466,356
Q2
ÂŁ465,722
32.7%
ÂŁ618,232
-24.5%
ÂŁ466,683
Q3
ÂŁ460,686
33.1%
ÂŁ612,967
-21.9%
ÂŁ478,594
Q4
ÂŁ458,363
32.9%
ÂŁ609,315
-21.5%
ÂŁ478,227
2020
Q1
ÂŁ460,266
36.2%
ÂŁ626,687
-23.8%
ÂŁ477,665
Q2
ÂŁ475,448
31.9%
ÂŁ627,339
-24.1%
ÂŁ476,443
Q3
ÂŁ480,857
32.0%
ÂŁ634,773
-23.0%
ÂŁ488,805
Q4
ÂŁ486,562
29.2%
ÂŁ628,648
-21.8%
ÂŁ491,637
2021
Q1
ÂŁ482,576
27.8%
ÂŁ616,808
-19.5%
ÂŁ496,435
Q2
ÂŁ509,935
25.9%
ÂŁ641,961
-23.0%
ÂŁ494,512
Q3
ÂŁ500,980
27.7%
ÂŁ639,700
-20.6%
ÂŁ508,164
Q4
ÂŁ507,230
27.2%
ÂŁ645,214
-20.3%
ÂŁ513,978
2022
Q1
ÂŁ518,333
26.0%
ÂŁ653,333
-19.7%
ÂŁ524,570
Mortgage approval prices Nationwide Halifax Asking prices Rightmove Sold prices Land registry
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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 14 international offices.