The Rightmove report found that this put average asking prices at 0.5% lower than a year ago.
Rightmove said this bucked the trend of sellers making modest asking price increases in June, with average rises of 0.1% over the last 10 years. The firm said the price decline indicated that sellers were adjusting their price expectations in response to buyers competing and becoming price-sensitive.
The housing market usually slows down from spring to summer, and Rightmove said sellers therefore needed to tempt buyers with attractive pricing.
However, this was not the case across all regions and local markets, especially areas with different affordability pressures.
Prices fell across all Southern England regions and Wales, but held up in the North East and Scotland.
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Rightmove said the number of homes for sale was still historically high for this time of year, making the competition even stronger and the need to price correctly more important.
Colleen Babcock, property expert at Rightmove, said it was “unusual” to see a price fall of this size in June, as there was usually a modest price growth at this time of year.
She added: “What’s different this time is a combination of factors, including wider economic uncertainty, the timing of the May bank holiday and unusual heatwave, and the high number of homes on the market, which together appear to be bringing forward the traditionally slower summer market.
“In this kind of market, sellers need to work harder to attract attention. Setting a competitive asking price from the outset is key, as buyers are taking more time to compare options and are quick to move on if a home doesn’t stand out on value. When sellers are over-optimistic on price and find they need to reduce later to sell, it can be harder to regain momentum, which underlines just how important it is to get the pricing right from day one.”
Buyers act with patience
Rightmove recorded a 10% year-on-year fall in buyer demand in May, but said this was in line with activity seen so far this year.
It attributed this to higher mortgage rates putting pressure on household budgets, and an increase in housing supply, causing buyers to be less urgent.
The number of newly listed homes coming to market fell by 5% year-on-year, which Rightmove said could be a sign that the market was settling into its typical seasonal pattern a little earlier than normal.
Despite this, the number of listings is still 6% up on 2024 and 12% higher than in 2023.
The number of sales agreed is 6% lower annually, but still in line with previous years, such as 2024 and 5% above 2023.
Babcock added: “While the summer market has come a bit early this year, overall activity is still within a typical historic[al] range. What has changed is some buyer behaviour; with more homes to choose from and higher borrowing costs, buyers are deliberating more and taking longer over their decisions. Sales activity remains stable, but it’s a very price-sensitive market, with buyers looking out for the right property at the right price. It’s encouraging to see another slight reduction in average mortgage rates this month, which is a small step in the right direction for affordability and market sentiment. While rates remain elevated, even modest changes can make a difference to buyers’ budgets and confidence.”
Mortgage affordability improves
Rightmove’s daily mortgage tracker found that the typical two-year fixed rate fell from 5.18% to 5.07%, reducing the average monthly mortgage payment by around £30.
Matt Smith, Rightmove’s mortgage expert, said it was encouraging to see average rates fall and even small reductions could make a difference to buyers’ budgets.
He added: “While rates remain higher than the lows of recent years, they have been relatively stable over a sustained period, which is helping to provide more certainty for those planning a move.”
Smith said there was still underlying volatility in the economic and global market, which could see rates move in either direction, but “the key takeaway for buyers is that we’re currently in a period of greater stability than we’ve seen previously, and that stability can help support confidence, particularly for those who are close to affordability limits and weighing up their next step”.
