"The healthy and improving level of property sales being agreed shows us that there are motivated buyers out there who are willing to finalise a deal for the right property"
- Colleen Babcock - Rightmove
The average asking price for property in the UK has dropped by 1.2% this month, falling by £4,531 to £373,709, according to the latest data released by Rightmove.
While July typically sees a seasonal dip, this marks the largest decline for the month recorded by Rightmove in over two decades of data. Sellers are responding to intense competition by pricing homes more attractively in a bid to engage distracted summer buyers.
London has been the biggest regional driver of this month’s price reduction, with a 1.5% fall in new seller asking prices. Inner London led the regional decrease with a 2.1% drop. Factors contributing to this include recent changes to stamp duty, as well as updates to non-dom tax rules and broader uncertainty over future tax reforms, all of which may be dampening investor demand in central areas.
Despite the fall in headline prices, buyer activity has remained strong. The number of sales being agreed is 5% higher than at the same point last year, and buyer interest has also increased, with a 6% rise in enquiries to estate agents compared to July 2024. More sellers are taking a realistic approach in response to a market where the supply of homes for sale remains at a decade-high level.
“We’re seeing an interesting dynamic between pricing and activity levels right now,” said Colleen Babcock, property expert at Rightmove. “The healthy and improving level of property sales being agreed shows us that there are motivated buyers out there who are willing to finalise a deal for the right property."
"What’s most important to remember in this market is that the price is key to selling. The decade-high level of buyer choice means that discerning buyers can quickly spot when a home looks over-priced compared to the many others that may be available in their area. It appears that more new sellers are conscious of this and are responding to this high-supply market with stand-out pricing to entice buyers and get their home sold.”
Across Great Britain, regional trends have diverged. While London recorded the steepest monthly fall, the North East saw a 1.2% increase in average asking prices. As the least expensive region in the country, it continues to benefit from stronger price growth relative to more costly markets. Rightmove noted that around 90% of the national housing market lies outside the capital, meaning broader trends remain more stable than the London figures might suggest.
Affordability for buyers is gradually improving. Rightmove’s mortgage tracker reveals that the average two-year fixed mortgage rate now stands at 4.53%, down from 5.34% a year ago. This equates to a saving of nearly £150 per month on a typical mortgage based on the current average asking price, a 30-year term, and a 20% deposit. Additionally, with wage growth surpassing both inflation and house price increases, affordability conditions are moving in a more favourable direction for many buyers.
Year-on-year, the average new seller asking price is now just 0.1% higher than in July 2024. In contrast, average earnings have risen by over 5%. This gap is helping more buyers re-enter the market or consider moving home, particularly those who had previously been priced out.
Rightmove has adjusted its 2025 forecast in response to these market dynamics. The average asking price for a home is now expected to rise by 2%, rather than the previously predicted 4%. However, the platform has maintained its expectation of 1.15 million housing transactions over the course of the year.
“It’s been a promising first half of the year for activity levels, particularly when you consider that some will have brought their plans forward to try to avoid added stamp duty from April,” said Babcock. “Even after the stamp duty deadline, we’re seeing more sales being agreed and more new potential buyers entering the market than at the same time last year. Still, the knock-on effect of high buyer choice is slower price growth, so we’re revising down our prediction of how much the asking price of a home will increase over the whole of the year."
"Looking ahead to the second half of 2025, there will still very likely be the usual quieter seasonal periods around the summer holidays and Christmas, but we expect market activity to continue to be resilient. Crucially, buyer affordability is heading in the right direction, and another two Bank Rate cuts before 2026 would be a big boost to this.”, she concluded.
Markets are currently forecasting two further Bank Rate cuts in 2025, which could enhance buyer affordability further and stimulate increased activity in the latter part of the year. Although some seasonal quiet periods are expected, estate agents are optimistic that the combination of competitive pricing and gradually improving affordability will keep the market moving.
Nathan Emerson, CEO of Propertymark, comments, “The housing market is witnessing a steady return to normality following Stamp Duty threshold changes for those living in England and Northern Ireland at the start of April. As we enter the summer months, when the housing market tends to achieve a peak in sales activity, it is good to see yet further resilience in house prices year on year.
“We have seen encouraging signs from Rachel Reeves’ Leeds Reforms, which are designed to potentially better help lenders serve those on lower incomes. However, such reforms alone will not help keep house prices manageable without the UK Government and the devolved administrations meeting their individual housing targets to keep pace with real-world demand.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says, “What’s particularly interesting about these figures is that they confirm what we’ve been seeing on the ground recently. Asking prices are not, of course, values but invariably an owner’s aspirational starting point to determine if genuine buyers are attracted.
“Sales are still being agreed but nearly always with sellers who have recognised the importance of setting a realistic initial figure to differentiate themselves from so much other, often similar, property.
“Otherwise, buyers will take even more time waiting for the ‘right’ property and perhaps worrying about the possibility of autumn tax rises despite improving affordability, including the likelihood of imminent mortgage rate cuts.”
Tomer Aboody, director of specialist lender MT Finance, says: “With affordability increasing, putting buyers in a better position to purchase, sellers are competing for a relatively limited number of buyers. A reduction in pricing further indicates eagerness from sellers to attract those buyers, which has also increased transaction levels,"
“With stamp duty increasing, buyers have been hit but are taking advantage of lower interest rates. We could potentially see at least one more rate reduction this year, which will further drive demand.”
