UK asking prices fall at fastest August pace since 2018

Britain’s housing market has suffered a sharp August setback, with sellers cutting more than £7,000 from the price of newly listed homes as a growing supply of properties collides with hesitant buyers.

The average asking price for a new listing fell 2 per cent, or £7,360, to £364,999 this month, according to Rightmove. It was the biggest August decline since 2018 and substantially worse than the 10-year seasonal average fall of 1.3 per cent.

The deterioration prompted Rightmove to abandon its forecast for house prices to rise 2 per cent this year. It now expects average asking prices either to remain flat or fall by as much as 2 per cent in 2026.

The annual picture is already turning negative, with asking prices 1 per cent below August last year — the largest year-on-year decline since December 2023.

A 12-year high in the number of homes available for sale has shifted bargaining power towards buyers, while the traditional summer lull has left sellers facing an increasingly crowded market.

“Many sellers are recognising the reality of the market and pricing much more competitively from day one,” said Colleen Babcock, a property expert at Rightmove.

The regional divide is stark. Average asking prices in the North West are 1.9 per cent higher than a year ago, while London has suffered a 3.1 per cent decline.

Buyer activity remains about 10 per cent below last year’s level, although Rightmove reported a “mini bounce” since Andy Burnham became prime minister. The revival faces tests from mortgage rates, geopolitical uncertainty and October’s Budget.

The slowdown is meanwhile creating opportunities for investors with cash to deploy. Hamptons found that 56 per cent of investor offers in July were at least 10 per cent below asking price, rising to 63 per cent among cash buyers. Some 27 per cent of those discounted offers were accepted, compared with 18 per cent a year earlier.

Yet the rental market is telling a different story. Newly agreed rents rose 1.9 per cent annually in July to £1,401 a month, their fastest growth in 19 months.

The housing market is therefore splitting in two as homeowners are cutting prices to find buyers while tenants continue paying more to secure a roof over their heads.