London lettings and estate agent, Benham and Reeves, has published its latest Property Market Index Review, revealing a second consecutive quarterly drop in UK house prices.
The index, which uses data from Halifax, Nationwide, Rightmove, and the UK House Price Index, indicates that the average UK house price for Q1 2023 stood at £305,646, marking a -1.2% decline from Q4 2022.
In London, the average house price reached £569,522, also falling for the second consecutive quarter, down -1.6% compared to Q4 2022.
Despite these declines, UK and London house prices remain 3.6% and 1.8% higher on an annual basis, respectively.
The report highlights a widening gap between buyers and sellers, with the UK market seeing a 34.1% difference between the mortgage-approved price of a buyer (£271,098) and the asking price expectations of a seller (£363,416). In London, the gap sits at 32.4% between buyer (£511,293) and seller (£676,707).
Marc von Grundherr, director of Benham and Reeves, said: “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.”
Von Grundherr added: “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.”
He anticipates that sellers will slowly adapt to the market conditions, leading to a soft landing without a significant reduction in property values.
“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,” he concluded.
