According to the Rightmove house price index, the number of available homes is at a decade high, leading sellers to price more competitively.
Rightmove said this was the largest monthly fall in prices recorded across more than 20 years of data. The firm said the number of homes on the market has “limited price growth”, as well as the start of the summer holiday season, where sales tend to slow down.
Its data found that London was the biggest regional driver for the overall price falls, with a 1.5% drop in the capital to an average price of £684,689. Prices were also 1.1% lower than last year.
The North East was the only region to record an increase in average asking prices, with a 1.2% lift to £196,844. This was 2% up on the year before.
Flat price growth was seen in the East Midlands, at an average of £292,244, while annually this was a slight increase of 0.6%.
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Overall, asking prices across the UK were just 0.1% higher than last year, and Rightmove said affordability was improving as lower mortgage rates and wage increases outstripped house prices and inflation.
Based on data from its mortgage tracker, Rightmove said the average two-year fixed rate was 4.53%, compared to 5.34% last year, meaning someone buying a home at the average asking price would now save nearly £150 per month on a 30-year term mortgage with a 20% deposit.
‘Interesting dynamic’ between pricing and activity
Colleen Babcock, property expert at Rightmove, said: “We’re seeing an interesting dynamic between pricing and activity levels right now. The healthy and improving level of property sales being agreed shows us that there are motivated buyers out there who are willing to finalise a deal for the right property. What’s most important to remember in this market is that the price is key to selling.
“The decade-high level of buyer choice means that discerning buyers can quickly spot when a home looks overpriced compared to the many others that may be available in their area. It appears that more new sellers are conscious of this and are responding to this high-supply market with standout pricing to entice buyers and get their home sold.”
Good level of house sales still expected
Rightmove said the number of sales agreed was 5% up, partially due to competitive pricing, and there was a 6% rise in prospective buyers contacting estate agents.
It downgraded its expectations for average asking prices to rise 4% over the year to 2%. It said the annual rate of growth would still be 0.1%, as buyer activity was “encouraging” but the level of supply would limit prices.
Rightmove maintained its prediction that there would be 1.15 million housing transactions this year, saying the outlook was positive for the second half of 2025 and the two forecast base rate cuts would stimulate activity further.
Babcock added: “It’s been a promising first half of the year for activity levels, particularly when you consider that some will have brought their plans forward to try to avoid added stamp duty from April. Even after the stamp duty deadline, we’re seeing more sales being agreed and more new potential buyers entering the market than at the same time last year. Still, the knock-on effect of high buyer choice is slower price growth, so we’re revising down our prediction of how much the asking price of a home will increase over the whole of the year.
“Looking ahead to the second half of 2025, there will still very likely be the usual quieter seasonal periods around the summer holidays and Christmas, but we expect market activity to continue to be resilient. Crucially, buyer affordability is heading in the right direction, and another two bank rate cuts before 2026 would be a big boost to this.”
