UK House Prices Drop £4,969 as Sellers Embrace Competitive Pricing

UK house prices have experienced a notable decline, dropping by an average of £4,969 this month as sellers adopt more competitive pricing strategies. The latest house price index from Rightmove indicates that asking prices for new listings fell to an average of £368,740 in August, reflecting a typical downward trend observed over the past decade. This shift in pricing comes after a significant drop of over £10,000 in the previous months of June and July, as sellers strive to attract buyers during a period traditionally marked by lower activity due to holiday distractions.

According to Rightmove’s property expert Colleen Babcock, “Savvy summer sellers have read the room and are coming to market with even more competitive pricing than usual to really stand out and attract serious and active buyers.” She noted that buyers are currently benefiting from asking prices that are, on average, £10,000 lower than three months ago. This trend has empowered buyers in a market characterized by high supply, making attractive pricing essential for closing sales.

The number of sales agreed in July reached its highest level for this time of year since 2020, a period when the market had recently reopened after the initial pandemic lockdown and significant stamp duty reductions had been introduced. Despite this positive momentum, Babcock cautioned that the high rate of price reductions suggests that some sellers are still entering the market with inflated prices, which necessitates subsequent reductions to become competitive.

Rightmove’s data highlights that successful sales are more likely when properties are priced correctly from the start. Homes that did not require a price reduction took an average of 32 days to find a buyer, while those needing a price cut took over three times longer at 99 days. The current number of sales agreed is now 8% higher than at the same time last year, attributed to lower asking prices and an increase in available properties for buyers to choose from.

The total number of homes for sale has risen by 10% compared to last year, maintaining a supply level at its highest point in a decade. However, the influx of new properties entering the market has only increased by 4%, potentially indicating that supply levels may be beginning to stabilize.

Babcock stated, “We expect this good buyer activity to help support prices in the next few months.” The average time for buyers to secure a property is currently 62 days, but this could improve as further interest rate cuts are anticipated. The Bank of England recently implemented its third interest rate cut of 2025, which is expected to enhance market confidence in the coming months.

According to Rightmove’s daily mortgage tracker, buyer affordability has improved, with the average two-year fixed mortgage rate now at 4.49%, down from 5.17% a year ago. This reduction translates to a saving of approximately £117 per month for someone taking out a two-year fixed mortgage on an average home, assuming a 20% deposit and a 30-year repayment term.

Matt Smith, a mortgages expert at Rightmove, remarked, “The markets are currently forecasting one more base rate cut before the end of the year.” He noted that lenders are adjusting their rates to remain competitive, although significant further reductions may not be feasible across the entire market.

In Yorkshire and The Humber, Steve Beercock, executive director at Beercocks, reported a positive start to August, highlighting a surge in sales during the first week of the month. He emphasized the importance of setting the right price initially to avoid the need for later reductions. Beercock anticipates a strong September, attributing the uptick in activity to the recent reduction in the Bank of England’s base rate.

Similarly, Amy Reynolds, head of sales at Antony Roberts in Richmond, London, noted that both July and August have surpassed expectations in terms of sales activity. She specifically pointed to a rebound in the first-time buyer flat market, which had initially slowed following the end of the stamp duty holiday.

While some buyers may hesitate, hoping for further price drops, Reynolds advised that the end of the summer holiday period typically heralds a busier market. Those holding back may risk losing out on desirable properties, making it prudent to engage with sellers directly to assess their positions.

Overall, the UK housing market appears to be in a state of transition, with competitive pricing strategies among sellers playing a crucial role in navigating this evolving landscape. As market conditions shift, both buyers and sellers are urged to remain vigilant and responsive to current trends.