Property Asking Prices Decline in July
According to the latest data from Rightmove, property asking prices have experienced a notable decline this month. The average price of properties coming to the market for sale dropped by 1.2 per cent in July. This means that the average newly listed home is now priced at £373,709, down from a record high of £379,517 in May.
This decrease is significant as it marks the largest monthly drop in property prices during July in over 20 years of recorded data. Typically, there is a seasonal dip in prices during this time of year, but the magnitude of this fall suggests a more pronounced shift in the market dynamics.
Rightmove has adjusted its price forecasts for the year, cutting them in half. Previously, the prediction was for a 4 per cent growth in property prices for 2025, but this has been revised to just 2 per cent. The primary cause of this downturn is an oversupply of homes on the market. With the number of properties for sale remaining at a 10-year high, the excess supply is keeping prices under pressure. This situation is further exacerbated by the start of the traditional summer holiday season, which often leads to reduced buyer activity.
Zoopla’s figures also highlight the growing number of homes available for sale. In June, there were 37 homes for sale per estate agent branch on average across the country, up from 31 at the start of 2025. This trend has continued throughout the year, with the number of homes per estate agent increasing each month. Comparing this to previous years, the numbers are even more striking. For instance, in June 2023, there were 27 homes for sale per estate agent, and in June 2021 and 2022, the average was 18 homes per agent.
The Importance of Pricing
Rightmove emphasizes that pricing plays a crucial role in the current market. Sellers who set overly optimistic initial asking prices risk being overlooked amidst the competition. Colleen Babcock, a property expert at Rightmove, highlights the importance of competitive pricing. “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,” she said.
She adds that more new sellers are becoming aware of this and are adjusting their pricing strategies to stand out and attract buyers. This shift is essential for sellers looking to sell their homes in a highly competitive market.
Regional Variations in Asking Prices
While the national average shows a decline in July, the situation varies across different regions. In the South East, average newly listed asking prices fell by 1.2 per cent, while in the East Midlands, they remained flat. London, however, saw the most significant regional monthly price fall, dropping by 1.5 per cent, particularly in Inner London.
Certain areas in London experienced substantial declines. For example, newly listed asking prices in Camden fell by 2.7 per cent compared to June, and Westminster recorded a 2.9 per cent decline. Hammersmith and Fulham saw a 2.5 per cent drop, while Southwark experienced a 2.7 per cent decrease.
The increase in stamp duty in April 2024 in England has had a more pronounced effect in London, where property prices are higher. Additionally, last year’s increase in stamp duty for investment and second homes is also influencing the market. A landlord or second home buyer purchasing a £1 million property in London can now expect to pay £93,750 in stamp duty.
Changes to non-dom tax rules and uncertainty around future tax changes may also be affecting investment in the central London market.
Regional Price Increases
Despite the overall decline in London, some regions saw increases in asking prices in July. The North East, which is the least expensive region in the UK, experienced a 1.2 per cent rise in prices this month. This continues a trend where cheaper areas are seeing faster price growth.
Future Outlook
Looking ahead, mortgage rates are expected to fall, with two more interest rate cuts anticipated in 2025. This could lead to a more positive outlook for the second half of the year, according to Rightmove. While the average newly listed asking price for a UK home is only 0.1 per cent higher than a year ago, average earnings have increased by over 5 per cent.
The average two-year fixed mortgage rate is now 4.53 per cent, down from 5.34 per cent at the same time last year. For someone purchasing a home at the average asking price, this translates to a monthly saving of nearly £150 on a new mortgage over 30 years with a 20 per cent deposit.
Experts at Rightmove expect the annual rate of growth to increase from its current 0.1 per cent, as the number of buyers actively searching for homes remains encouraging. Colleen Babcock notes that the first half of the year has been promising for activity levels, with some buyers bringing their plans forward to avoid additional stamp duty from April.
Even after the stamp duty deadline, more sales are being agreed, and more new potential buyers are entering the market than at the same time last year. Looking ahead, while there will likely be quieter periods during the summer holidays and Christmas, market activity is expected to remain resilient. Buyer affordability is improving, and another two Bank Rate cuts before 2026 would be a significant boost to the market.
