"Prices have now dipped slightly from where they were at this time last year after a summer of competitive pricing by sellers, and it’s the south of England which is driving this small dip"
- Colleen Babcock - Rightmove
The average asking price of a property coming to market has risen by 0.4% this month, equivalent to £1,517, taking the figure to £370,257. Despite this modest monthly increase, average new seller prices are now 0.1% below the same point last year, reflecting several months of subdued growth.
The annual fall is being driven by London and the south of England, where activity is underperforming compared to other regions. In these areas, competition among sellers is particularly high. The number of homes for sale in the south has risen by 9% year-on-year, compared with 2% across the rest of Great Britain, and sellers typically wait an extra five days to find a buyer.
Even with these pressures, the number of sales agreed across the country is 4% higher than a year ago. This includes a 3% increase in the south and a 5% rise in the rest of Great Britain.
Colleen Babcock, property expert at Rightmove, explained, “We’d expect to see a slight uptick in new seller asking prices in September, with the traditional back-to-school season boosting activity heading into autumn. This year’s 0.4% September price rise is a little lower than the norm, which is an average of 0.6% at this time of year.
"However, prices have now dipped slightly from where they were at this time last year after a summer of competitive pricing by sellers, and it’s the south of England which is driving this small dip. It’s the sensible and attractive seller pricing we’ve been reporting, which has been helping to drive more sales activity compared to last year. Static house prices, rising wages, and lower mortgage rates all assist buyer affordability, which has led to an increase in the number of sales agreed compared to a year ago.”
Regional variations highlight this imbalance. The West Midlands has seen a marginal yearly drop of 0.1%. In the South West, prices are down by 1.3%, while in the North West they are up by 3.2%. The higher volume of stock in the south, at decade-high levels, has contributed to this weaker performance.
Rightmove’s data indicates that rumours around property tax reforms have not yet prompted any immediate change in market behaviour. However, uncertainty linked to the Autumn Budget on 26 November could weigh on higher-value markets.
The potential impact is significant. In London, 59% of agreed sales so far this year have been for properties over £500,000, which would be affected by a reformed stamp duty system. Outside London, the figure is 22% on average, and just 8% in the North East. London also has a much larger proportion of homes valued above £1.5 million, at 11%, compared with 2% elsewhere, meaning a higher exposure to the proposed mansion tax.
Colleen Babcock noted: “Rumours of property tax changes began swirling in mid-August, and with the Budget itself not arriving until the end of November, this kind of extended uncertainty can affect market activity, especially in the higher price brackets. Movers want to be confident in planning their moving costs."
"Our real-time data has not yet picked up any major shifts, however, it’s understandable that those who could be negatively affected by the rumoured changes might be in the process of reassessing their short- and medium-term plans. Our analysis highlights how London and south England-centric the changes would be, and these are the areas that are already performing less strongly.”
The Bank of England is widely expected to hold rates at its September meeting. It has now been just over a year since the first cut in more than four years in August 2024. During that period, the average two-year fixed mortgage rate has dropped from 5.03% to 4.52%. For an average home purchase, this reduction translates into almost £100 less in monthly repayments, assuming a 20% deposit and 30-year term.
Mary-Lou Press, president of NAEA Propertymark, commented, “Recent Stamp Duty threshold changes and concern regarding the forthcoming budget have added fuel to the fire when it comes to the confidence of potential home movers. As mortgage products start to improve and provide light at the end of the tunnel for many, people might now be faced with additional tax to pay when purchasing, potentially adding further pressure on finances.
“House price growth is a sign of wider economic health; therefore, without clear support for people to step onto or move up and down the housing ladder, there’s a concern that this might stagnate the wider property market and prove a setback regarding restoring financial stability.”
