The average UK house price for Q1 2023 was £305,646, down by 1.2% from the previous quarter, according to the latest Property Market Index Review by Benham and Reeves.
This marks a second consecutive quarterly decline following a 0.7% drop in Q3 2022. However, house prices remain 3.6% higher than last year.
The average house price in London is currently £569,522, reflecting a 1.6% decline from the previous quarter but a 1.8% increase year on year.
The report also highlights the growing gap between buyer and seller expectations. The market gap between the mortgage approved price of a buyer and the asking price expectations of a seller increased to 34.1% across the UK, the highest gap seen since Q3 2020.
In London, the gap between buyer and seller expectations is 32.4%, the largest gap seen since Q1 2020.
The report also shows that the gap between the average asking price and the average sold price has increased in both the UK and London.
Across the UK, the average sold price of £289,818 currently sits 20.3% below the average asking price of £363,416, and this gap has increased on a quarterly basis.
Similarly, in London, the gap between asking price and sold price sits at -21.1%, having also increased over the last two quarters.
Marc von Grundherr, director of Benham and Reeves, said: “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.”