Average asking prices for newly-listed homes in the UK dropped by 1% in July, representing a sharper decline than the typical seasonal pattern, according to Rightmove’s latest House Price Index.
The property portal recorded a £3,832 decrease to £372,359, significantly above the 0.2% average July decline observed over the past decade. Second stepper homes experienced the largest fall at 0.9%, while top of the ladder and first-time buyer properties declined by 0.5% and 0.6% respectively.
Market activity below prior year
Sales agreed in the first half of the year were 6% lower than the same period in 2025, though matched levels from the first half of 2024. Available housing stock stood 1% below last year’s levels but remained close to a 12-year high for this time of year.
Rightmove attributed the decline to multiple factors including increased mortgage rates following the Iran conflict, political uncertainty, the World Cup, and persistent heatwaves. The portal’s analysis showed the May heatwave triggered a temporary 8% drop in buyer demand, with June’s heatwave causing a 6% decline and July’s contributing a further 4% dip.
Colleen Babcock, property expert at Rightmove, said: “This month’s larger-than-normal price fall reflects the reality of a market where buyers have plenty of choice and sellers are having to work harder to stand out and attract them.”
Pricing sensitivity increases
New research from Rightmove highlighted growing price sensitivity among buyers. Three quarters of homes that completed sales this year did so without a price reduction. Properties requiring price cuts spent an average of 127 days on the market, compared with just 36 days for those selling at the original asking price.
Nathan Emerson, Chief Executive of Propertymark, noted: “In recent months, we have witnessed mortgage borrowing dip significantly, alongside a lower volume of new mortgage approvals.” He added that attention would focus on the Bank of England’s upcoming rate decision.
The market conditions echo challenges facing first-time buyers across different price points, with affordability concerns prominent despite recent expansion of high loan-to-value mortgage products.
Jeremy Leaf, north London estate agent and former RICS residential chairman, said: “Continuing uncertainty prompted by present domestic political upheaval and possible resultant uplift in some taxes is adding to previous concerns about the Iran war’s impact on interest rates and the cost of living.”
Industry calls for policy support
Tomer Aboody, founding director of MT Finance, commented: “Affordability remains a concern as the Iran War keeps mortgage rates higher for longer. However, lenders are keen to lend and needs-based buyers are taking advantage of higher leveraged deals in order to buy.”
Babcock called on incoming Prime Minister Andy Burnham to prioritise housing policy, stating: “A new Prime Minister also presents an opportunity to make housing a renewed priority, with action needed to support affordability, mobility and the delivery of more homes.”
Aboody suggested stamp duty reductions could boost transactions and benefit the wider economy. Market participants expect the traditional summer slowdown to persist as schools break for holidays, with activity levels likely to remain subdued until autumn.
