UK property market showed resilience in Q2

The latest summary of market health from lettings and sales agent, Benham and Reeves, has revealed that the market stood firm in Q2 despite the broader turbulence of lockdown.

Benham and Reeves have combined data from the top four house prices indices to give an overall view of market health based on buyer and seller expectations via mortgage and asking price data, as well as market performance where sold prices are concerned.

The latest index shows that:

• The average UK house price is currently £255,370, up 0.4% on the previous quarter and 1.5% on an annual basis;
• Mortgage approved house prices via Nationwide and Halifax remained mostly flat between Q1 and Q2, while asking prices increased by 0.8%. This means that sellers were pricing 36.5% higher than the amounts committed to by UK buyers funded via mortgages;
• This over exuberant pricing was also clear where sold prices are concerned, with a -25.1% difference between the average sold price and average asking price;
• In London, property prices climbed 1.1% on the previous quarter and 2.1% annually to £523,071;
• In contrast to the wider UK market, mortgage-based house prices in the capital jumped 3.3% in Q2, while asking prices increased by just 0.1%. As a result, the gap between London buyer and seller expectation reduced to just 31.9%, the smallest gap since Q4 of 2018.

However, the gap between the average London asking price and the average London sold price climbed marginally to -23.5% between Q1 and Q2 of this year; the largest gap since the same period last year.

Director of Benham and Reeves, Marc von Grundherr, commented: “Despite the restrictions of a nationwide lockdown, the UK property market has continued to hold firm on all fronts during the second quarter of this year.

“Buyers continued to take advantage of what have been very favourable mortgage rates in Q2, pushing their property purchasing budgets that little further. Sellers have continued to enter the market with somewhat over-optimistic price expectations. But the two have met in the middle to ensure sold prices continue on their upward trajectory.

“With the dust having settled on what is arguably the most challenging period for the market since the financial crash, it’s hugely reassuring to see that we remain in a very good position and one that should only grow stronger as the months go on.

“While further lockdown restrictions may dampen our spirits in the lead up to the festive season, they certainly shouldn’t dampen our appetite for homeownership and all in all, we can expect to finish the year in a much better place than we could have thought possible back in March.”