The Benham and Reeves house price index uses data from the four leading industry indices to give a singular figure of how the UK market is moving based on both buyer and seller sentiment. It also looks at the difference in these indices and what they reveal about the state of the current market.
Current property values
The latest index from Benham and Reeves shows that the current overall average UK house price is sitting at £252,487 having increased by 0.3% on the previous quarter, up by 0.9% on an annual basis.
In London, the average property value climbs to £513,180, up 0.2% on the previous quarter, although prices in the capital are still down -0.8% on an annual basis.
Sellers remain over expectant
The latest quarterly data from Nationwide and Halifax shows that the amount UK buyers are committing to borrowing has fallen -0.7% to an average of £224,490.
Tough market conditions have also caused the average asking price expected by UK home sellers to fall quarter to quarter. However, the drop has been more marginal at -0.4%, and at £306,321, the average UK asking price is still some 36.5% higher than the mortgage approval sum.
This over expectation is also evident when comparing asking prices to sold prices, with the current average sold price coming in at £234,075, -23.6% lower than the current average asking price, although sales prices themselves have crept up 2.1% on the previous quarter.
A tougher time for the London market means this gap between seller expectation and market reality is smaller.
However, the difference between the average price approved by Nationwide and Halifax and the average asking price is still at 33.1%, while sold prices in the capital are still some -21.9% lower than the current average asking price. Although, again, sold prices have increased by 2.6% quarter to quarter.
Director of Benham and Reeves, Marc von Grundherr, commented: “An over-inflated asking price is a common occurrence in the market and one often driven by a seller’s emotions coupled with the tendency for an agent to overvalue in order to win business.
However, with political uncertainty causing a large degree of market turmoil, we’ve seen many sellers lower their asking price expectations in order to secure a sale. As a result, there has been a slight uplift in sold prices as buyers agree to meet in the middle. However, the deficit between what we believe our homes are worth and what buyers are actually paying remains rather large.
As we enter a new decade, we may see this gap continue to close, but the likelihood is that as market activity heightens we will once again see asking prices increase as buyer activity returns and UK home sellers chance their arm at a higher price point.”
Data sourced from the Land Registry House Price Index, the Halifax and Nationwide House Price Indexes and the Rightmove House Price Index.
Read more articles on the current state of the UK property market in our dedicated section here.
