"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"
- Marc von Grundherr - Benham and Reeves
The property market continued to demonstrate positive momentum during the third quarter of this year, with house prices increasing for a third consecutive time, according to the latest Property Market Index Review by London lettings and estate agent Benham and Reeves.
However, the rate of growth slowed considerably compared to the first half of the year.
The market gap between buyer and seller also narrowed as sellers adopted a more pragmatic approach to pricing in line with market conditions. For those who secured a buyer, an increase in sold price values helped narrow the gap further.
The Benham and Reeves Property Market Index Review is a quarterly accumulation of house price data from the top four existing indices.
The review examines 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.
The index also highlights how the gap has changed between buyers' and sellers' expectations, 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 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%). The long-term view remains positive, with house prices standing 1.7% higher compared to Q3 of last year.
London's 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 the London market has stood firm in the long term, with house prices down by just 0.4% compared to Q3 2024.
Market gap between mortgage approval price (buyers) and 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 from the previous quarter when this gap sat at 33.1%, largely driven by a reduction in the average asking price and a more realistic approach to pricing on the side of the nation's home sellers.
In London, the gap between mortgage-approved house prices (£527,694) 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) and sold price (buyers)
The latest index 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.
"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," said Marc von Grundherr, director of Benham and Reeves.
"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 note 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."
