The latest Property Market Index Review by London lettings and estate agent, Benham and Reeves, has revealed that house prices fell by -0.6% in Q4 of last year, marking a second consecutive quarter of negative growth across both the UK and London markets. However, the gap between seller asking price expectation and the price paid by buyers also narrowed for the second time since 2022, as buyers and sellers both adjust to the new normal of higher mortgage rates in order to get a sale over the line.
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 £302,912 during the fourth quarter of 2023.
This marked a -0.6% quarterly decline, and the second consecutive quarter of negative house price growth in the UK. On an annual basis, the average UK house price also sat -1.4% lower in Q4 2023 versus Q4 2022.
In London, the current average house price in Q3 2023 was £563,459 having also declined by -0.9% versus the previous quarter.
As with the national picture, this is the second consecutive quarter of negative growth following a -0.2% reduction during Q3 2023, with London house prices also down -2.5% annually.
Market Gap Between Mortgage Approval Price (Buyers) & Asking Price (Sellers)
In Q4 2023, the market gap between the average mortgage approved price of a buyer (271,172)) and the asking price expectation of a seller (£361,811) fell to 33.4% across the UK.
This is the first time that this gap has narrowed since Q3 of 2022, suggesting that sellers are coming to terms with the reduced purchasing power of buyers in the face of higher mortgage rates and adjusting their own price expectations to secure a buyer.
In London, the gap between buyer (£515,132) and seller (£675,839) is 31.2% which also marks a quarterly narrowing. This is the second consecutive quarter that this gap has narrowed, again suggesting 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 has continued to close.
Across the UK, the average sold price in Q4 2023 stood at £283,285, -21.7% below the average asking price of £361,811. This is the second consecutive quarter that the gap has narrowed rather than expanded since Q4 2022.
In London, the gap between asking price and sold price sits at -24% having expanded on the previous quarter when it narrowed for the first time Q3 2022.
This suggests that London’s sellers are more reluctant to reduce their asking price expectations in order to secure a buyer, instead opting to wait it out for a suitable offer.
Director of Benham and Reeves, Marc von Grundherr, commented:
“A further marginal cooling in house prices during the closing stages of last year was only to be expected given the ongoing headwinds of higher mortgage rates which continued to dampen market activity on the buyer side of the market.
The good news, it looks as though buyers and sellers are coming to terms with this new normal of higher borrowing costs, with both parties seemingly more willing to meet in the middle in order to progress with their plans to move.
Interestingly, London’s sellers have been less willing to adjust their expectations and while this may have resulted in a reduction in overall market activity across the capital, those who do secure a buyer are doing so at a higher percentage of asking price.
It will be interesting to see how the market performs over the year ahead, with mortgage market activity and house prices already starting to regain momentum. Such early signs of returning market health suggest that the gap between asking prices and sold prices could soon start to climb once again, as more buyers look to out bid each other for what stock is available on the market.”
Benham and Reeves HPI – UK
UK
Year
Quarter
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
£253,980
0.8%
Q2
£254,839
0.3%
Q3
£261,758
2.7%
Q4
£266,980
2.0%
2021
Q1
£267,995
0.4%
Q2
£276,820
3.3%
Q3
£281,719
1.8%
Q4
£287,281
2.0%
2022
Q1
£293,831
2.3%
Q2
£304,828
3.7%
Q3
£310,440
1.8%
Q4
£307,330
-1.0%
2023
Q1
£302,562
-1.6%
Q2
£304,999
0.8%
Q3
£304,805
-0.1%
Q4
£302,912
-0.6%
UK Mortgage Approval Price vs Asking Price
UK
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%
£309,602
Q2
£228,511
36.5%
£311,950
Q3
£234,497
36.4%
£319,919
Q4
£240,495
33.8%
£321,830
2021
Q1
£241,628
32.0%
£318,896
Q2
£251,031
32.4%
£332,460
Q3
£255,474
32.3%
£338,093
Q4
£262,639
30.3%
£342,333
2022
Q1
£269,818
29.0%
£348,085
Q2
£279,592
30.7%
£365,386
Q3
£282,809
30.0%
£367,628
Q4
£275,397
32.8%
£365,731
2023
Q1
£271,099
34.1%
£363,413
Q2
£273,431
35.6%
£370,638
Q3
£270,013
36.2%
£367,682
Q4
£271,172
33.4%
£361,811
UK Asking Price vs Sold Price
UK
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
£309,602
-25.1%
£231,743
Q2
£311,950
-25.6%
£232,169
Q3
£319,919
-25.3%
£239,067
Q4
£321,830
-23.6%
£245,868
2021
Q1
£318,896
-21.7%
£249,794
Q2
£332,460
-23.5%
£254,172
Q3
£338,093
-23.4%
£258,862
Q4
£342,333
-23.0%
£263,700
2022
Q1
£348,085
-22.4%
£270,109
Q2
£365,386
-24.1%
£277,261
Q3
£367,628
-21.7%
£287,761
Q4
£365,731
-21.2%
£288,200
2023
Q1
£363,413
-22.6%
£281,135
Q2
£370,638
-24.5%
£279,962
Q3
£367,682
-22.4%
£285,240
Q4
£361,811
-21.7%
£283,285
Benham and Reeves HPI – London
London
Year
Quarter
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
£528,890
-0.5%
Q2
£545,420
3.1%
Q3
£545,427
0.0%
Q4
£551,185
1.1%
2022
Q1
£559,440
1.5%
Q2
£579,028
3.5%
Q3
£582,493
0.6%
Q4
£577,741
-0.8%
2023
Q1
£567,972
-1.7%
Q2
£569,874
0.3%
Q3
£568,699
-0.2%
Q4
£563,459
-0.9%
London Mortgage Approval Price vs Asking Price
London
Year
Quarter
Mortgage Approvals Price (Nationwide – London)
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
Q4
£515,132
31.2%
£675,839
London Asking Price vs Sold Price
London
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
-19.4%
£497,029
Q2
£641,961
-22.8%
£495,645
Q3
£639,700
-20.9%
£506,307
Q4
£645,214
-20.7%
£511,663
2022
Q1
£653,333
-20.9%
£517,033
Q2
£682,759
-22.9%
£526,159
Q3
£681,232
-20.3%
£542,742
Q4
£681,419
-21.3%
£535,983
2023
Q1
£676,707
-21.7%
£529,553
Q2
£686,271
-24.0%
£521,694
Q3
£678,176
-22.2%
£527,313
Q4
£675,839
-24.0%
£513,837
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.
Sources: 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 14 international offices.