London lettings and estate agent, Benham and Reeves, has released its latest Property Market Index Review providing the most comprehensive view of UK and London house price performance.
The Benham and Reeves Property 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, the index from Benham and Reeves shows the average UK house price sat at ÂŁ305,646 for the first quarter of 2023.
This marked a -1.2% drop on the final quarter of 2022, a second consecutive quarterly drop with prices having fallen by -0.7% between Q3 and Q4 of 2022. The first quarterly declines seen since the final quarter of 2019 before the pandemic market boom began. However, the index from Benham and Reeves shows that house prices remain 3.6% higher on an annual basis.
In London, the current average house price is ÂŁ569,522, having also fallen for a second quarter in a row, down -1.6% versus Q4, 2022. However, house prices remain 1.8% higher across the capital on an annual basis.
Market Gap Between Mortgage Approval Price (Buyers) & Asking Price (Sellers)
The market gap between the mortgage approved price of a buyer (ÂŁ271,098) and the asking price expectations of a seller (ÂŁ363,416) has increased to 34.1% across the UK, the largest gap seen since the third quarter of 2020.
This suggests that not only are buyers treading with greater caution due to the higher cost of borrowing, but sellers are yet to come to terms with a cooling market when setting their asking price.
In London, the gap between buyer (ÂŁ511,293) and seller (ÂŁ676,707) sits 32.4%, the largest gap seen since Q1, 2020.
Market Gap Between Asking Price (Sellers) & Sold Price (Buyers)
This mismatch between seller expectation and the reality of current market conditions is also clear when analysing the gap between the average asking price and the average sold price.
Across the UK, the average sold price of ÂŁ289,818 currently sits -20.3% below the average asking price of ÂŁ363,416. This gap has increased on a quarterly basis, up from 19.7% during the final quarter of 2022.
In London, the gap between asking price and sold price sits at -21.1% having also increased over the last two quarters.
Director of Benham and Reeves, Marc von Grundherr, commented:
“Following a prolonged period of unprecedented house price growth, we’ve continued to see a gradual return to normality in 2023, with a second quarterly reduction in the average value of a home across both the UK and London markets.
What’s also clear is that buyers simply aren’t acting with the same intent following a sustained period of interest rate hikes, but we’re yet to see sellers fully accept this change in the landscape, with the gap between buyer purchasing power and seller asking prices at its largest since the third quarter of 2020.
The result of this current market imbalance is also reflected in the sold price to asking price balance, with this gap widening so far this year as buyers refuse to overstretch to secure their desired property.
While we expect this trend will persist over the course of the year as sellers adjust to the reality of current market conditions, we don’t predict any notable reduction in property values, rather a soft landing.”
View Benham and Reeves Quarter 1 House Price Index here
Average UK House Price
Year
Quarter
Benhams and Reeves Aggregated Average House Price
Q Change
Annual 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%
1.0%
Q2
ÂŁ251,682
1.7%
1.4%
Q3
ÂŁ252,487
0.3%
0.9%
Q4
ÂŁ251,914
-0.2%
1.4%
2020
Q1
ÂŁ253,983
0.8%
2.6%
Q2
ÂŁ254,839
0.3%
1.3%
Q3
ÂŁ261,757
2.7%
3.7%
Q4
ÂŁ266,981
2.0%
6.0%
2021
Q1
ÂŁ268,398
0.5%
5.7%
Q2
ÂŁ277,353
3.3%
8.8%
Q3
ÂŁ282,390
1.8%
7.9%
Q4
ÂŁ288,210
2.1%
8.0%
2022
Q1
ÂŁ294,970
2.3%
9.9%
Q2
ÂŁ306,122
3.8%
10.4%
Q3
ÂŁ311,639
1.8%
10.4%
Q4
ÂŁ309,306
-0.7%
7.3%
2023
Q1
ÂŁ305,646
-1.2%
3.6%
Average London House Price
Year
Quarter
Benhams and Reeves Aggregated Average House Price
Q Change
Annual 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%
-2.8%
Q2
ÂŁ512,193
1.5%
-1.6%
Q3
ÂŁ513,180
0.2%
-0.8%
Q4
ÂŁ511,166
-0.4%
-0.7%
2020
Q1
ÂŁ516,489
1.0%
2.3%
Q2
ÂŁ521,842
1.0%
1.9%
Q3
ÂŁ530,383
1.6%
3.4%
Q4
ÂŁ531,778
0.3%
4.0%
2021
Q1
ÂŁ528,680
-0.6%
2.4%
Q2
ÂŁ544,987
3.1%
4.4%
Q3
ÂŁ545,230
0.0%
2.8%
Q4
ÂŁ550,215
0.9%
3.5%
2022
Q1
ÂŁ559,362
1.7%
5.8%
Q2
ÂŁ578,900
3.5%
6.2%
Q3
ÂŁ582,526
0.6%
6.8%
Q4
ÂŁ578,939
-0.6%
5.2%
2023
Q1
ÂŁ569,552
-1.6%
1.8%
UK – Mortgage to Asking Price House Price Gap
Year
Quarter
Mortgage Approvals Price
Asking Price
Difference
2018
Q1
ÂŁ218,231
ÂŁ300,684
37.8%
Q2
ÂŁ219,116
ÂŁ307,745
40.4%
Q3
ÂŁ221,959
ÂŁ305,060
37.4%
Q4
ÂŁ220,522
ÂŁ302,239
37.1%
2019
Q1
ÂŁ221,578
ÂŁ300,481
35.6%
Q2
ÂŁ225,987
ÂŁ307,691
36.2%
Q3
ÂŁ224,490
ÂŁ306,316
36.5%
Q4
ÂŁ225,188
ÂŁ303,169
34.6%
2020
Q1
ÂŁ228,344
ÂŁ309,611
35.6%
Q2
ÂŁ228,511
ÂŁ311,950
36.5%
Q3
ÂŁ234,497
ÂŁ319,919
36.4%
Q4
ÂŁ240,495
ÂŁ321,833
33.8%
2021
Q1
ÂŁ241,628
ÂŁ318,901
32.0%
Q2
ÂŁ251,031
ÂŁ332,478
32.4%
Q3
ÂŁ255,474
ÂŁ338,093
32.3%
Q4
ÂŁ262,639
ÂŁ342,338
30.3%
2022
Q1
ÂŁ269,818
ÂŁ348,129
29.0%
Q2
ÂŁ279,592
ÂŁ365,405
30.7%
Q3
ÂŁ282,809
ÂŁ367,634
30.0%
Q4
ÂŁ275,397
ÂŁ365,765
32.8%
2023
Q1
ÂŁ271,098
ÂŁ363,416
34.1%
London – Mortgage to Asking Price House Price Gap
Year
Quarter
Mortgage Approvals Price (Nationwide – London)
Asking Price
Difference
2018
Q1
ÂŁ473,776
ÂŁ619,905
30.8%
Q2
ÂŁ468,845
ÂŁ628,174
34.0%
Q3
ÂŁ468,544
ÂŁ614,537
31.2%
Q4
ÂŁ466,988
ÂŁ614,044
31.5%
2019
Q1
ÂŁ455,594
ÂŁ605,178
32.8%
Q2
ÂŁ465,722
ÂŁ618,232
32.7%
Q3
ÂŁ460,686
ÂŁ612,967
33.1%
Q4
ÂŁ458,363
ÂŁ609,315
32.9%
2020
Q1
ÂŁ460,266
ÂŁ626,687
36.2%
Q2
ÂŁ475,448
ÂŁ627,339
31.9%
Q3
ÂŁ480,857
ÂŁ634,773
32.0%
Q4
ÂŁ486,562
ÂŁ628,648
29.2%
2021
Q1
ÂŁ482,576
ÂŁ616,808
27.8%
Q2
ÂŁ509,935
ÂŁ641,961
25.9%
Q3
ÂŁ500,980
ÂŁ639,700
27.7%
Q4
ÂŁ507,230
ÂŁ645,214
27.2%
2022
Q1
ÂŁ518,333
ÂŁ653,333
26.0%
Q2
ÂŁ540,399
ÂŁ682,759
26.3%
Q3
ÂŁ534,545
ÂŁ681,232
27.4%
Q4
ÂŁ528,000
ÂŁ681,419
29.1%
2023
Q1
ÂŁ511,293
ÂŁ676,707
32.4%
UK – Asking Price to Sold Price House Price Gap
Year
Quarter
Asking Price
Sold Price
Difference
2018
Q1
ÂŁ300,684
ÂŁ224,319
-25.4%
Q2
ÂŁ307,745
ÂŁ226,869
-26.3%
Q3
ÂŁ305,060
ÂŁ231,438
-24.1%
Q4
ÂŁ302,239
ÂŁ230,274
-23.8%
2019
Q1
ÂŁ300,481
ÂŁ227,608
-24.3%
Q2
ÂŁ307,691
ÂŁ229,276
-25.5%
Q3
ÂŁ306,316
ÂŁ234,074
-23.6%
Q4
ÂŁ303,169
ÂŁ234,167
-22.8%
2020
Q1
ÂŁ309,611
ÂŁ231,743
-25.2%
Q2
ÂŁ311,950
ÂŁ232,169
-25.6%
Q3
ÂŁ319,919
ÂŁ239,067
-25.3%
Q4
ÂŁ321,833
ÂŁ245,868
-23.6%
2021
Q1
ÂŁ318,901
ÂŁ250,920
-21.3%
Q2
ÂŁ332,478
ÂŁ255,628
-23.1%
Q3
ÂŁ338,093
ÂŁ260,715
-22.9%
Q4
ÂŁ342,338
ÂŁ266,264
-22.2%
2022
Q1
ÂŁ348,129
ÂŁ273,225
-21.5%
Q2
ÂŁ365,405
ÂŁ280,791
-23.2%
Q3
ÂŁ367,634
ÂŁ291,102
-20.8%
Q4
ÂŁ365,765
ÂŁ293,767
-19.7%
2023
Q1
ÂŁ363,416
ÂŁ289,818
-20.3%
London – Asking Price to Sold Price House Price Gap
Year
Quarter
Asking Price
Sold Price
Difference
2018
Q1
ÂŁ619,905
ÂŁ476,653
-23.1%
Q2
ÂŁ628,174
ÂŁ478,555
-23.8%
Q3
ÂŁ614,537
ÂŁ480,090
-21.9%
Q4
ÂŁ614,044
ÂŁ476,273
-22.4%
2019
Q1
ÂŁ605,178
ÂŁ466,356
-22.9%
Q2
ÂŁ618,232
ÂŁ466,683
-24.5%
Q3
ÂŁ612,967
ÂŁ478,594
-21.9%
Q4
ÂŁ609,315
ÂŁ478,227
-21.5%
2020
Q1
ÂŁ626,687
ÂŁ477,665
-23.8%
Q2
ÂŁ627,339
ÂŁ476,443
-24.1%
Q3
ÂŁ634,773
ÂŁ488,805
-23.0%
Q4
ÂŁ628,648
ÂŁ491,637
-21.8%
2021
Q1
ÂŁ616,808
ÂŁ496,435
-19.5%
Q2
ÂŁ641,961
ÂŁ494,465
-23.0%
Q3
ÂŁ639,700
ÂŁ505,757
-20.9%
Q4
ÂŁ645,214
ÂŁ508,965
-21.1%
2022
Q1
ÂŁ653,333
ÂŁ516,815
-20.9%
Q2
ÂŁ682,759
ÂŁ525,810
-23.0%
Q3
ÂŁ681,232
ÂŁ542,833
-20.3%
Q4
ÂŁ681,419
ÂŁ539,326
-20.9%
2023
Q1
ÂŁ676,707
ÂŁ533,986
-21.1%
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.
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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.