Average new seller asking prices dropped by 1.3% (-£4,969) this month to £368,740, says Rightmove.
The portal insists that this price drop is in line with the previous 10-year average, but it admits that the average new seller asking price for a home has now fallen by just over £10,000 (-£10,777) this summer.
This has contributed to the highest number of sales agreed in the full month of July since 2020.
Even so, Rightmove warns that some sellers are still coming to market with a too-high initial price, shown by more than one in three homes seeing a price reduction during marketing.
“Savvy summer sellers have read the room and are coming to market with even more competitive pricing than usual to really stand out and attract serious and active buyers. Astute buyers are now benefitting from new seller asking prices which are on average an enticing £10,000 cheaper than three months ago” says Colleen Babcock, property expert at Rightmove.
She continues: “Buyers have the upper hand in this high-supply market, so a tempting price is vital to agree a sale. The strategy is working, with the number of sales agreed in the full month of July being the best at this time of year since 2020. At that time, the market had recently re-opened after the first pandemic lockdown, and generous stamp duty reductions had just been announced.
“However, the high number of price reductions we’re seeing is an indicator that some sellers are still coming to market with too high a price and then reducing it to become competitive. Our data shows that for a successful sale it’s better to get the price right in the first place, but if a seller does need to reduce the price it’s better to act fast rather than waiting too long.”
The number of sales being agreed is now 8% higher than at this time last year, with lower asking prices and good buyer choice combining to drive higher than usual sales activity for this time of year.
The number of available homes for sale is 10% higher than at this time last year, keeping the volume of homes for sale at a decade high.
However, the number of new properties coming onto the market for sale is now only 4% ahead of this time last year, potentially an early sign of overall supply levels starting to slowly reduce, particularly with strong sales activity. We expect this good buyer activity will help to support prices in the next few months.
Sellers should note that 34% of homes are now seeing a reduction in price during marketing. In data that goes back to 2012, this figure has only been higher at this time of year in 2023, and a two-speed market is becoming more evident.
The overall average time to find a buyer is now 62 days, with the high number of homes for sale allowing buyers the time to make their choice and negotiate. However, if a home is priced right from the outset and doesn’t require an asking price reduction, the average time to find a buyer is 32 days, whereas if a home does need a reduction in asking price, this more than triples to 99 days.
The Bank of England’s third interest rate cut of 2025 is likely to be another boost of confidence for the market over the remaining months of the year.
Rightmove’s daily mortgage tracker shows that buyer affordability has been improving, with the average two-year fixed mortgage rate now 4.49%, compared with 5.17% at this time last year. This equates to a saving of £117 per month for someone taking out a two-year fixed mortgage on the average home, based on having a 20% deposit and spreading the mortgage over 30 years.
Rightmove expects some further small mortgage rate reductions over the next few weeks but no major drops. While this year’s third interest rate cut is positive news for home-movers, the vote was closer than many expected, which has created some uncertainty over a previously anticipated fourth Bank Rate cut later in the year.
“It was positive to see last week’s third Base Rate cut of the year, but the supporting commentary from the Bank of England suggests the opportunity for further cuts has narrowed” cautions Matt Smith, Rightmove’s mortgages expert.
He continues: “The markets are currently forecasting one more cut before the end of the year. Lenders have moved their rates downwards to remain competitive, but there doesn’t look like much room for too many further reductions if current market forecasts play out. We could potentially see some lenders squeeze their margin to gain a competitive advantage, but I don’t think this would play out across the market and would likely target specific segments of movers.
”Overall, with further data to be releases and external events to play out, I think it’s likely rates will remain pretty much flat from here, with only small movements up or down.”
