The latest data and analysis from lettings and sales agent, Benham and Reeves, looks at where the average house price sits and how the gap between buyer and seller expectation and actual sales has changed.
Figures covering Q4 2019 show that the current overall average UK house price is sitting at £251,912 having dropped marginally by -0.2% on the previous quarter, although prices were up by 1.4% on an annual basis. In London, the average property value also dropped marginally to £511,166, down -0.4% on the previous quarter, down -0.7% on an annual basis.
Seller and buyer expectations show signs of alignment
The latest quarterly data from Nationwide and Halifax shows that the amount UK buyers are committing to borrowing has increased slightly by 0.31% to £225,188. At the same time, the average asking price has fallen by -1.02%, while sold prices are up 0.4% to £234,167.
Despite a market bounce following the election, it’s clear that months of Brexit uncertainty have seen the expectation gap between buyers and sellers close. The gap between buyer expectation and asking prices dropped -1% in Q4 to 35%, while there was also a -1% decrease between asking price and sold price, down to -23%.
However, in London, this gap remained consistent with a 33% increase between the price at which buyers were being approved for a mortgage and the asking price expectations of UK sellers, while there was a -22% drop between this asking price and the average sold price.
Marc von Grundherr, Director of Benham and Reeves, commented: “It’s only natural that asking prices will remain at a higher level than the average mortgage approval or sold price, but it’s interesting to see that months of Brexit uncertainty had started to bring this difference in buyer and seller expectations closer together.
"As buyers committed to slightly more in the way of a mortgage approval price to take advantage of lower market values and lower interest rates, sellers realised they had to lower asking expectations to secure a deal in tough market conditions. This also translated to a smaller gap between asking price and the sold price accepted.
"However, with a huge spike in activity following December’s election, we will no doubt see asking prices start to lift once again, as UK sellers look to take advantage of returning buyer demand.
"While this asking price expectation will always be higher than the reality of the average sold price, an optimistic increase in a stronger market places sellers in a better position to negotiate a stronger sale price before accepting an offer.”