The UK housing market has seen notable shifts recently, with the difference between the original asking price of homes and the final sale price narrowing to 17.4%. This figure marks a decrease from 20% recorded in September 2024, reflecting changing dynamics between sellers and buyers. According to the latest market analysis by eXp UK, sellers are increasingly aligning their price expectations with current market conditions, leading to minor increases in the average sold price and slight reductions in asking prices.
The South West region has experienced the most significant improvement, with the average sold price now 15.9% below the asking price, down from 21.1% before the Autumn Budget. Similarly, both the South East and Wales have seen their price gaps shrink, with reductions of 4.3% and 3.1%, respectively. London, known for its competitive property market, has the narrowest price gap nationally, where buyers are now paying only 5.6% below the asking price.
On the other hand, the North East has emerged with the largest market gap, currently standing at 29.6%. Conversely, Scotland is facing challenges, with the gap widening slightly to 22.6%, up from 22.4% last September.
Adam Day, head of eXp UK, commented on the current trends, stating, "Since Labour delivered its first big budget, the market gap has started to narrow between the asking price expectations of the nation’s sellers and the reality of what buyers are willing to pay." He attributes this improvement largely to the achievement of higher sale prices combined with lower entry point expectations from sellers.
Day also suggested, "This has no doubt been driven, in part, by the Government’s decision not to extend current stamp duty relief thresholds beyond March of this year, and it’s fair to say they’ve done little else to try and stimulate the market to offset the higher costs buyers face as of April 1." His insights indicate the current climate encourages both buyers and sellers to adjust their expectations to facilitate transactions.
The outlook for the housing market remains cautiously optimistic. Day expressed confidence, stating, "The good news is the improvements in market health being seen should remain for the long-term, and so we should continue to see sellers achieving a good price for their property long beyond April’s stamp duty deadline." This sentiment resonates across various segments of the market, highlighting the continued search for balance amid fluctuated buyer sentiment and pressing economic factors.
Overall, the narrowing of the property price gap signifies hopeful indicators of market stabilization, encouraging potential sellers to re-enter the market with adjusted pricing strategies. The interplay between government policy, buyer behavior, and market dynamics will likely continue to shape the UK housing market as the year progresses.