According to Rightmove, asking prices typically fall by 0.2% in July, but the property listing firm said that this year sellers were trying to lure buyers who were distracted by other events, such as the World Cup, heatwave and change of Prime Minister.
Rightmove said the warmer weather contributed to lower activity levels, as its analysis suggested that the heatwave in May resulted in an 8% fall in buyer demand. This rebounded before June’s heatwave caused a temporary 6% decline in demand, while demand fell by 4% in July.
Colleen Babcock, property expert at Rightmove, said: “This month’s larger-than-normal price fall reflects the reality of a market where buyers have plenty of choice and sellers are having to work harder to stand out and attract them. They’re also competing with an unusual number of distractions, which have been keeping the minds of some potential buyers occupied, namely the World Cup and the hot weather.
“While these diversions are short term, they’re adding to what is already a distracting summer holiday period to create a challenging selling environment.”
Tomer Aboody, founding director of MT Finance, said: “Wall-to-wall sunshine, combined with World Cup fever, is not good for housing market activity, and with schools now breaking up for the summer, distractions are likely to continue for a while yet.”
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Aboody said this was impacting asking prices, with sellers having to “price sensibly” to attract buyers.
He added: “Buyers are adopting a more cautious approach and are not prepared to pay over the odds, particularly when they have so much choice.
“Affordability remains a concern as the Iran War keeps mortgage rates higher for longer. However, lenders are keen to lend and needs-based buyers are taking advantage of higher leveraged deals in order to buy. The housing market could do with some encouragement from the new Prime Minister, in the form of lowering stamp duty, which would boost transactions and benefit the wider economy.”
Mortgage affordability still weighs on housing market
Although the number of homes up for sale was 1% down on last year, the firm said this was still close to a 12-year high for this time of year.
However, higher mortgage rates caused by the conflict in Iran impacted buyer sentiment and activity, resulting in a 6% year-on-year fall in the number of sales agreed in the first half of 2026.
Matt Smith, mortgage expert at Rightmove, said: “Mortgage rates are higher than many buyers would have hoped for at the start of the year, and the increases due to the war in Iran have understandably dented confidence for some. However, lenders remain keen to lend, and the mortgage market is still competitive.
“There is still uncertainty in the market, and recent mortgage cuts could stop in the near future, however, we’re not seeing the kind of difficult lending conditions that have caused more challenging markets in the past. If the outlook shifted and we saw reductions in mortgage rates, it would be a welcome boost to confidence and affordability.”
Rightmove’s analysis found that the average two-year fixed mortgage rate was currently 4.92%, up from 4.25% in February, before the war began. This was lower than the 5.07% average in the previous month. Rightmove said the other factors that contribute to an active housing market remained, such as lender competition and wages rising faster than house prices.
Right-priced homes sell faster
Rightmove said buyers had become more price-sensitive, and it was important for sellers to get the asking price right from the outset. Some 74% of homes that have successfully sold and completed this year did so without a price reduction.
Homes that do see their asking price reduced spend around 127 days on the market, compared to 36 days for properties that sell without a reduction.
Jeremy Leaf, North London estate agent and a former Royal Institution of Chartered Surveyors (RICS) residential chair, said: “These figures are particularly timely as they reflect whether sellers’ asking prices have responded realistically to the recent dip in buyer demand. The answer is ‘not bad but could do better’.
“Bearing in mind approximately four out of five sellers are also buyers, we are finding it is only homeowners who recognise the importance of concentrating on the difference between selling and buying prices, not the headline figure, which is looking increasingly unlikely to be achieved.”
