The average asking price of a newly listed home fell by 2% in August, the largest reduction recorded for the month since 2018, latest Rightmove data reveals.

The £7,360 monthly decline took the national average to £364,999, leaving asking prices 1% lower than a year earlier – their biggest annual fall since December 2023.

Rightmove attributed the decline to the seasonal slowdown, affordability pressures and the largest supply of homes for sale at this point of the year for 12 years.

Average two-year fixed mortgage rates also increased from 4.92% to 5.09% over the month as geopolitical uncertainty continued to affect lender pricing.

NORTH-SOUTH DIVIDE WIDENS

The national figures masked a widening regional divide, with asking prices in northern England rising by 1.5% annually while those in the south fell by 1.8%.

The North West recorded the strongest annual increase at 1.9%, while prices also increased in Scotland.

London suffered the largest decline, falling by 3.1% year-on-year as the number of homes available in the capital reached its highest level since 2010.

Rightmove said London buyers continued to face particularly acute affordability pressures, with the average home costing around 17 times the national average annual wage.

MINI BURNHAM BOUNCE

Buyer demand increased by 5% after Andy Burnham became Prime Minister on 20 July, compared with a 2% decline during the equivalent period last summer.

However, overall buying activity remained approximately 10% below last year’s level.

Rightmove said the improvement could support a stronger autumn market, although mortgage rates, geopolitical events and the Chancellor’s first Budget in October would continue to influence confidence.

The portal downgraded its 2026 asking-price forecast from 2% growth to a range between zero and a 2% decline.

RATES COULD EDGE LOWER

Matt Smith (main picture, inset), mortgage expert at Rightmove, said: “Confidence has taken a bit of a hit as fixed rates remain elevated and return above the psychologically important 5% mark.

“However, the mortgage market remains highly competitive, with lenders still keen to attract business and support borrowers.”

He added that lenders had built greater resilience into their pricing and there was some scope for mortgage rates to fall in the coming weeks despite continued geopolitical volatility.

Colleen Babcock, property expert at Rightmove, said a sustained housing recovery would depend on confidence, mortgage rates and the October Budget.

She added: “This month’s larger-than-usual August price drop is a sign that many sellers are recognising the reality of the market and pricing much more competitively from day one. Buyers have the widest choice of homes for sale at this time of year in more than a decade, so standing out on price for the right reasons is hugely important.

“While no seller likes to come to market lower than they might have hoped, Rightmove analysis shows that those who price realistically are statistically proven to be giving themselves the strongest chance of finding a buyer and successfully completing a move.

“One tactic some sellers are using when considering lower offers on their home, is to also make a lower offer themselves on their onwards purchase, to see if they can make up the difference.”

NEGATIVE REACTION

Tomer Aboody, director of specialist lender MT Finance, said: “With a further change in Prime Minister, along with the prospect of more taxation on the way, the property market is reacting negatively with buyers and sellers reluctant to make a move.

“As other opposition parties propose to cut stamp duty and some are even mooting the prospect of getting rid of it altogether, will the Government respond by looking to do the same in order to get the market moving? It would definitely be a step in the right direction.”

DIFFICULT TIMES

And Jeremy Leaf, north London estate agent and a former RICS residential chairman, added: “Although asking prices are not selling prices but often reflect owners’, or agents’, aspirational starting points, these figures help demonstrate how difficult it has become to attract genuine buyers.

“Confidence has not been helped by continuing worries about the direction of travel for interest rates and inflation, while speculation about possible tax changes in the Budget is inevitably weighing on decision-making in a price-sensitive market.

“The change in occupier at Number 10 Downing Street has prompted some re-awakening of demand but not enough so far to reduce in sufficient numbers the amount of stock overhanging the market, particularly flats.

“As a result, successful sellers need to go further than just set ‘fairly reasonable’ asking prices or make ‘token’ reductions as part of negotiations if they are serious about generating offers and achieving sales.”