The price fall follows a substantial 1.7% drop in July although, the Olympics failed to deter new sellers, with marginally more properties coming to market than in August 2011.
However, those sellers are competing hard on price to attract buyers, said Rightmove.
Sellers who come to market in the middle of the summer holiday season often have an urgent reason to sell, said Rightmove. This means they traditionally set their asking prices aggressively lower, though -2.4% (-£5,837) is a substantial drop compared to the average fall of -1.1% measured in August over the last 10 years.
Olympic fever also hit with home hunters shunning the market during key moments over the fortnight including opening and closing ceremonies and ‘Super Saturday’ which saw plunges of up to 50% in Rightmove traffic.
With buyers distracted by sport and the economic backdrop, sellers will now have to compete hard to win their attention in the upcoming autumn selling season in order to move before Christmas.
Miles Shipside, Rightmove director and housing market analyst, said: “The number of new sellers is slightly up on the same period last year, though perhaps as a reflection of their urgency to sell, or to compensate for the distraction of the achievements served up by Team GB, they have dropped their asking prices more aggressively than summer sellers in previous years.”
Every region of the country recorded month-on-month price falls for the first time since November 2011.
Shipside added: “With the average time on the market being 92 days, any seller coming to market and hoping to move before Christmas needs to get their skates on to tempt a buyer who can proceed. It is possible that they may be assisted by the Bank of England’s Funding for Lending scheme, which may lead to greater mortgage availability at more competitive rates.”
Meanwhile, Council of Mortgage Lending figures for July recorded an 8% month-on-month rise in lending on June to £12.7bn.
CML market and data analyst Caroline Purdey said gross mortgage lending continued to see-saw, albeit against a broadly flat market.
“Interpretation of recent trends continues to be challenged by one-off effects. We look forward to the September figures when the distorting effects of the Diamond Jubilee and the Olympics should largely have worked their way through.”
