House prices post third consecutive quarter of growth
The latest Property Market Index Review by London lettings and estate agent, Benham and Reeves, has revealed that the property market continued to demonstrate positive momentum during the third quarter of this year, with house prices increasing for a third consecutive time, although the rate of growth seen did slow considerably when compared to the first half of the year.
However, the market gap between buyer and seller also narrowed, as sellers adopted a more pragmatic approach to pricing in line with market conditions and, for those who did secure a buyer as a result, an increase in sold price values also helped to narrow the gap.
The Benham and Reeves Market Index Review
The Benham and Reeves Property Market Index Review* is a quarterly accumulation of house price data from the top four existing indices, providing the most comprehensive view of UK and London house price performance.
It looks at where the average house price sits overall when taking into account mortgage approved house prices from Halifax and Nationwide, seller expectations via the Rightmove House Price Index, and sold prices from the UK House Price Index.
It also highlights how the gap has changed between buyers and seller expectation, as well as asking price and actual sales price, on a quarterly basis across London and the UK.
Current property values
Based on a geometric mean of all four existing data sets, the index from Benham and Reeves shows the average UK house price sat at £306,283 in Q3 of this year.
This marked a 0.2% quarterly increase, the third consecutive quarter of positive growth seen this year, although a more muted level when compared to the quarterly gains seen in Q1 (+0.8%) and Q2 (+0.7%). However, the long-term view also remains one of positivity, with house prices remaining 1.7% higher when compared to Q3 of last year.
In London, the average house price in Q3 2025 sat at £584,794. This marked a 1.6% decline on the previous quarter, the first quarterly decline in house price growth seen since Q4 2024. However, the annual picture demonstrates that the London market has stood firm in the long-term, with house prices down by just 0.4% when compared to Q3 2024.
Market Gap Between Mortgage Approval Price (Buyers) & Asking Price (Sellers)
In Q3 2025, the market gap between the average mortgage approved price of a buyer (£284,911) and the asking price expectation of a seller (£370,986) sat at 30.2%.
This marked a reduction on the previous quarter when this gap sat 33.1%, largely driven by a reduction in the average asking price and more realistic approach to pricing on the side of the nation’s home sellers.
In London, the gap between mortgage approved house prices (£5527,694) and seller asking prices (£675,543) was 28%. As with the wider national picture, this marked a reduction on the previous quarter, again driven by a reduction in asking prices as sellers looked to combat quieter market conditions.
Market Gap Between Asking Price (Sellers) & Sold Price (Buyers)
The latest index by Benham and Reeves shows that the difference between the average UK asking price and the average sold price has also reduced.
Across the UK, the average sold price in Q3, 2025 stood at £271,898, -26.7% below the average asking price of £370,896. This is the smallest gap since Benham and Reeves began its index in 2017, driven by more realistic asking prices on the side of sellers, but also an increase in sold prices on the buyer side. This suggests that whilst the market may have been more muted in 2025, those who did secure a sale achieved a strong market price for their property.
In London, the difference between asking price and sold price sits at -17%, the smallest market gap recorded by Benham and Reeves since Q1 2023.
Director of Benham and Reeves, Marc von Grundherr, commented:
“The UK property market continued to post positive movement during the third quarter, however, the quarterly rate of house price growth slowed considerably when compared to the first half of the year.
This was largely down to a heightened degree of market uncertainty, which we now know persisted right up until the Autumn Budget, however the long-term picture is one of annual growth which demonstrates just how resilient the UK property market is.
The good news is that the market gap between buyer and seller has closed and this has been largely down to sellers entering the market at a more realistic asking price point. And whilst the market has certainly been quieter, those who did manage to secure a sale continued to achieve stronger market values, with sold prices continuing to climb over the course of the year.
Of course, as is often the case, the London market has been impacted to a greater extent by this shift in sentiment. While UK house prices increased by 0.2% in Q3 compared to Q2, values across the capital fell by 1.6% over the same period – although the positive to take is that annually the market remained largely unchanged.
That said, London has historically been quicker to react to changing market conditions, both on the way up and on the way down. As a result, periods of short-term correction in the capital often reflect a market adjusting ahead of the wider UK, rather than any fundamental weakness. With pricing expectations now far more closely aligned and confidence beginning to return post-Budget, London is well placed to stabilise and regain momentum as the market moves forward.”
You May Also Enjoy
Political uncertainty adds to the many distractions for summer buyers
Here’s how to avoid garden rows this summer
Breaking Property News 16/7/26
Why the postcode can make a big difference to your rebuild costs
New record rents as rental supply falls for first time since 2022
