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UK home sellers made unusually deep price cuts this summer, marking the steepest fall for July since records began over 20 years ago. Average asking prices dropped by 1.2%, with sellers reducing expectations by nearly GBP 4,600 in an effort to stand out in a crowded market. London and higher-end properties took the biggest hit. However, buyer activity remained strong, helped by falling mortgage rates and better wage growth. Although some momentum from earlier tax incentives has faded, overall market sentiment continues to show resilience despite economic uncertainty and rising supply pressures.
UK home sellers are cutting prices at the sharpest rate seen in July for over two decades, as rising property listings force greater competition. Data from property portal Rightmove revealed that average asking prices across the country fell by 1.2%, equal to a reduction of around GBP 4,531. This marks the most significant July drop since the company began tracking prices more than 20 years ago. Advertisement
The price correction reflects a seasonal dip, but this year's fall is larger than usual. Sellers, especially in London and the South East, are adjusting to high stock levels by pricing more competitively. Larger homes, such as four- and five-bedroom detached properties, have seen bigger markdowns than smaller homes, as demand continues to be more concentrated in affordable segments.
Despite the decline in prices, overall buyer interest has remained steady. Rightmove reported that agreed sales have risen 5% compared to the same period last year. At the same time, buyer inquiries to agents are up 6%. Falling mortgage rates and improving wage growth appear to be supporting demand. For example, the average two-year fixed mortgage rate has eased from around 5.34% earlier this year to 4.53%, potentially reducing monthly repayments by close to GBP 150 for a typical buyer.
This follows a rush seen earlier in the year, when homebuyers hurried to close deals ahead of the end of temporary stamp duty benefits. That period of heightened activity has since cooled, and the market is now transitioning into a more stable but supply-heavy phase. Rightmove now expects house price growth to slow, revising its full-year forecast from 4% down to 2%. However, the portal still expects around 1.15 million transactions by the end of the year.
London continues to show signs of weakness, particularly in central zones, where affordability constraints remain more pronounced. Inner-city homes in the capital have seen price drops of over 2%, and sellers in these regions are under growing pressure to meet buyer expectations.
The growing gap between listed prices and final sale prices suggests buyers are not willing to pay inflated rates. Instead, many are targeting well-priced homes or waiting for further reductions. This has created a more price-sensitive market where accurate valuation is crucial for a successful sale.
Looking ahead, expectations for further rate cuts by the Bank of England could provide more breathing space for buyers. Markets currently anticipate two more quarter-point reductions by the end of the year, which could bring mortgage rates down further and improve affordability.
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