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In a surprising summer twist, UK home asking prices fell 0.3% last month, bringing the average to £378,240. The drop, driven by increased listings and keener competition, was most notable in London, the South East, and South West-where prices dipped up to 1.6%. The end of certain stamp duty reliefs and new levies on second homes spurred more coastal listings, particularly in Cornwall and Devon. Though prices remain 0.8% higher than a year ago, supply outpaces demand, encouraging faster deals as sellers price more realistically. Meanwhile, rentals cooled, with tenant registrations down 17% and growth slowing to 1.5% as more renters eye homeownership.
Amid what's typically a busy selling season, UK home asking prices dropped by 0.3% last month an unusual move during summer bringing the average down to GBP £378,240. Instead of rising, prices slipped as sellers grappled with increased competition and adjusted expectations. Advertisement
The decline was most pronounced in London, the South East, and the South West, where listings surged and prices fell by 0.9%, 1%, and 1.6%, respectively. Sellers are having to price more competitively to stand out amid a flood of new properties, fueled partly by the April removal of stamp-duty relief on certain homes. In coastal areas like Cornwall and Devon, the introduction of higher stamp duty on second homes and council tax has accelerated listings.
Despite the month-on-month drop, asking prices remain 0.8% above those from a year ago. Supply is up 11%, while demand trails behind at 3% growth yet this imbalance has led to the strongest level of sales agreed since 2022. Lenders like Nationwide and Halifax indicate that affordability is improving, reflecting a modest rebound in mortgage approvals.
Mortgage rates have eased from their 2023 peaks, and the Bank of England is expected to maintain its base rate at 4.25%, following four cuts since summer last year. Rightmove highlights competitive pricing as essential in this environment, explaining that with more homes for sale than buyers, realistic listings are driving quicker agreements.
Insights from agents reflect this shift. One noted that motivated sellers are dropping or adjusting asking prices, giving buyers more power, especially in desirable coastal zones . Analysts agree that pricing wisely at the outset and presenting properties well greatly boosts the odds of finding a buyer quickly.
On the rental side, Hamptons data signals a slowdown. Tenant registrations fell sharply, down by 17% year-on-year, pushing rental growth to just 1.5%, marking a deceleration from the double-digit pace seen previously. Lower mortgage rates are also encouraging some renters to become first-time buyers, shifting market dynamics.
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