Mini-boom in buyer demand since Burnham brings hope for autumn
August has seen the largest drop in house prices since 2018, with average newly-listed asking prices dropping by 2%, and average prices now 1% lower than a year ago – the largest annual price fall since December 2023.
The latest Rightmove House Price Index shows that asking prices slipped by £7,360 this month to £364,999. Although sellers typically cut prices in the quieter holiday period, this year’s cut is more significant than the ten-year average of -1.3%.
Regionally, the situation remains divided, with prices in the north of England up by 1.5% versus a year ago, while prices in the south of England are down by 1.8%.
London is home to the largest annual price drop, down 3.1%, and has the widest choice of homes on offer since 2010.
Meanwhile, prices in the North West have risen 1.9% annually, the biggest regional rise. Average prices are also higher in Scotland compared to last year, and only marginally down in the Midlands and Wales.
Mini-bounce in buyer demand since July 20
Despite the summer slump in asking prices, Rightmove reports a mini bounce in buyer demand, which is up 5% since Andy Burnham became Prime Minister on July 20th. The figure is still 10% lower than last year, but Rightmove says this rise could signal a busier Autumn.
Uncertainty in the Middle East has caused average mortgage rates to rise, with the average two-year rate now 5.09% from 4.92% last month.
As a result, Rightmove has downgraded its national average 2026 price forecast from +2% to between 0% and -2%, saying that the uncertain geopolitical picture, changing mortgage rates and the October budget make the rest of the year hard to predict.
Matt Smith, Rightmove’s mortgage expert, said that higher mortgage rates were a concern for buyers but that lenders had reacted accordingly. “Confidence has taken a bit of a hit as fixed-rates remain elevated and return above the psychologically important 5% mark. However, the mortgage market remains highly competitive, with lenders still keen to attract business and support borrowers.
“Many lenders have built greater resilience into their pricing, meaning they are generally better prepared to absorb shorter-term market shocks, which gives movers more stability even during periods of uncertainty. There are signs that, because of this additional buffer that lenders have built in, there is some scope for mortgage rates to reduce over the coming weeks, despite the geopolitical landscape still being quite volatile, and they have already started to edge downwards.”
