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Agency stock shortage helps close gap between asking and sold prices

The lack of agency stock for sale has pushed the gap between asking and sold prices to record lows, research claims.

Research by London agent Benham and Reeves compared mortgage approved house prices from Nationwide and Halifax with Rightmove listings and Land Registry data.

It found that the average mortgage approval price hit £269,769 during the first quarter of 2022 while the typical asking price was £348,129 – a 29% difference.

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That is the smallest gap recorded since Benham and Reeves began its research in 2018. 

The gap is down from 32% this time last year.

In London, the gap between mortgage approved and asking prices was 26% in the first quarter of 2022, down from 27.8% a year ago.

When Land Registry sold prices are added to the mix, the research found that buyers are paying £277,287 on average, a 20% gap on asking prices, also the lowest on record for the agent.

The gap was found to be smaller in London at 19.7%.

Marc von Grundherr, director of Benham and Reeves, said: “Despite a string of interest rate hikes, UK homebuyers continue to make hay while the sun shines, with mortgage approved house prices climbing yet again in 2022. 

“At the same time, asking prices have also increased but they haven’t done so with the same gusto. 

“As a result, this continued optimism from the nation’s buyers means that the gap between what they are borrowing and the notoriously ambitious asking price expectations of UK sellers is now at its smallest since we began our records back in 2018.

“But while buyers continue to swamp the market at mass, the challenge facing them is a severe lack of available stock and this is having a notable influence on the market reality gap between asking prices and sold prices.

“Sellers will always overprice when entering the market in order to leave a little room to do the dance during the negotiation stage. Although they continue to do so, they are finding that buyers are willing to come up that bit more than they previously have in order to secure a property.

“This has caused the gap between asking prices and sold prices to narrow to its lowest on record.”

UK
Year Quarter

Mortgage Approvals Price

< Difference > Asking Price < Difference > Sold Price
2018 Q1 £218,231 37.8% £300,684 -25.4% £224,319
Q2 £219,116 40.4% £307,745 -26.3% £226,869
Q3 £221,959 37.4% £305,060 -24.1% £231,438
Q4 £220,522 37.1% £302,239 -23.8% £230,274
2019 Q1 £221,578 35.6% £300,481 -24.3% £227,608
Q2 £225,987 36.2% £307,691 -25.5% £229,276
Q3 £224,490 36.5% £306,321 -23.6% £234,074
Q4 £225,188 34.6% £303,182 -22.8% £234,167
2020 Q1 £228,344 35.6% £309,611 -25.2% £231,743
Q2 £228,511 36.5% £311,950 -25.6% £232,169
Q3 £234,497 36.4% £319,919 -25.3% £239,067
Q4 £240,495 33.8% £321,833 -23.6% £245,868
2021 Q1 £241,628 32.0% £318,901 -21.3% £250,920
Q2 £251,031 32.4% £332,478 -23.0% £255,906
Q3 £255,474 32.3% £338,093 -22.7% £261,515
Q4 £262,639 30.3% £342,338 -21.6% £268,512
2022 Q1 £269,769 29.0% £348,129 -20.3% £277,287
London
Year Quarter

Mortgage Approvals Price (Nationwide - London)

< Difference > Asking Price < Difference > Sold Price
2018 Q1 £473,776 30.8% £619,905 -23.1% £476,653
Q2 £468,845 34.0% £628,174 -23.8% £478,555
Q3 £468,544 31.2% £614,537 -21.9% £480,090
Q4 £466,988 31.5% £614,044 -22.4% £476,273
2019 Q1 £455,594 32.8% £605,178 -22.9% £466,356
Q2 £465,722 32.7% £618,232 -24.5% £466,683
Q3 £460,686 33.1% £612,967 -21.9% £478,594
Q4 £458,363 32.9% £609,315 -21.5% £478,227
2020 Q1 £460,266 36.2% £626,687 -23.8% £477,665
Q2 £475,448 31.9% £627,339 -24.1% £476,443
Q3 £480,857 32.0% £634,773 -23.0% £488,805
Q4 £486,562 29.2% £628,648 -21.8% £491,637
2021 Q1 £482,576 27.8% £616,808 -19.5% £496,435
Q2 £509,935 25.9% £641,961 -23.0% £494,512
Q3 £500,980 27.7% £639,700 -20.6% £508,164
Q4 £507,230 27.2% £645,214 -20.3% £513,978
2022 Q1 £518,333 26.0% £653,333 -19.7% £524,570
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