Homes across the UK have sold for 21 per cent less than the asking price on average in Q1 this year, suggesting overpricing from sellers.
The average UK asking price in the three months to the end of March was just under £319,000, 32 per cent higher than the average asking price at which buyers were having mortgages approved, according to data from lettings and estate agent Benham and Reeves.
Actual sales came in nearly 21 per cent lower than the asking price, with an average of £252,860, according to the research which combines data from the top four house prices indices.
In London, the average sold price for Q1 was £499,446, a 19 per cent drop on the average asking price.
Meanwhile the rate of house price growth has slowed to 0.6 per cent, from 2.2 per cent in Q4 last year and 2.8 per cent in Q3, as the market reacted to the stamp duty holiday introduction in July last year.
The average house price in the UK in Q1 this year was £269,088, 5.9 per cent higher than the same point last year.
Marc von Grundherr, director of Benham and Reeves, said: “It’s now clear that the UK property market started to retract in the run up to the original stamp duty holiday deadline, as previously high levels of buyer activity started to dissipate bringing a decline in the rate of house price growth.
“As a result, sellers did have to adjust their price expectations when compared to the previous quarter and this meant the gap between asking and sold prices was at its smallest in over three years.
"But despite this, they continued to overprice by a considerable margin in the hope of securing a better price than they may have otherwise.”
He added the market had seen a fresh wave of enthusiasm since the last extension of the stamp duty holiday, and he expected buoyant levels of house price growth over Q3 and Q4 this year.
He said: “It will be interesting to see just what impact the new tapered deadlines have on the market and if either will spur a notable decline in market activity.
"Now that further insurance measures have been added in the way of 95 per cent mortgages and a refreshed Help to Buy scheme, we could see the market continue to perform very strongly even once the stamp duty holiday clock has expired.”