The average price of homes listed for sale saw its sharpest monthly decline in over two decades in July, according to a real estate platform, following the expiration of temporary reductions in stamp duty and recent hikes in council tax on additional properties.
New sellers reduced their asking prices by an average of 1.2%, or £4,531, in July compared to the previous month, bringing the average price down to £373,709.
While a seasonal dip in home prices is typical in July, marking the start of the summer holiday period, this month’s drop is the largest monthly fall recorded by Rightmove since its index was established in 2002.
The website also noted that rising property inventory, now at a 10-year high, is limiting price growth, meaning homeowners aiming to sell in the summer must price competitively to stand out to buyers.
“In the current market, getting the pricing right is crucial to a successful sale,” said Colleen Babcock, a real estate analyst at Rightmove.
“With buyers having more options than they’ve had in years, they can easily recognize when a property is priced too high compared to others nearby.”
London recorded the steepest asking price declines, with a 1.5% drop across the city and a sharper 2.1% decrease in inner London.
Temporary stamp duty reductions in England and Northern Ireland ended in April after the chancellor, Rachel Reeves, announced the change in her October budget. Scotland and Wales determine their own property taxes.
The stamp duty change has affected London more significantly due to higher home prices, particularly impacting buyers of second homes and investment properties.
While falling prices might once have signaled a sluggish market, actual property sales continue to rise annually, and lower asking prices are improving affordability.
Average new seller prices are just 0.1% higher than a year ago, a modest increase at a time when lower mortgage rates and wage growth outpacing inflation are supporting buyer budgets.
Agreed sales are up 5% compared to last year, and inquiries to real estate agents about available properties are 6% higher.
Rightmove has revised its 2025 price growth forecast downward, now expecting a 2% increase instead of 4%.
Despite this, with mortgage rates declining and expectations of further Bank of England rate cuts, the housing market outlook for the second half of the year remains positive. The average two-year fixed mortgage rate currently stands at 4.53%.
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