The firm says that prices usually fall in August, but this is a much larger August price drop than the ten-year average of -1.3%, and the largest since 2018.
The number of available homes for sale is also at a 12-year high for this time of year. When combined with the traditionally quiet summer holiday period, this has led to lower price expectations from sellers who have decided to come to market at this time of year, despite the lower volume of active buyers.
The average asking price for a home is now 1.0% lower than at this time last year, the largest annual drop in prices since December 2023.
Colleen Babcock, property expert at Rightmove, says: “This month’s larger-than-usual August price drop is a sign that many sellers are recognising the reality of the market and pricing much more competitively from day one. Buyers have the widest choice of homes for sale at this time of year in more than a decade, so standing out on price for the right reasons is hugely important.”
National averages are helpful in identifying trends over time, but increasingly this year they are masking a divided regional picture for property price growth. The northern regions of England have seen average new seller asking prices increase by 1.5% versus last year, while the southern regions of England have seen prices drop by 1.8%. London has seen the biggest yearly fall in prices of any part of Great Britain at -3.1%. Conversely, prices in the North West are up the most, by 1.9% annually.
Looking more closely at the capital, the number of available homes for sale in London is the highest it’s been in 16 years, outpacing the national trend, and meaning even more competition for sellers to find buyers. London is also facing a unique set of circumstances beyond just supply and demand trends which is creating challenges for some movers.
In terms of affordability, despite wage growth out-performing property price growth in recent years, an average home in London still costs around 17 times the national average annual wage, according to the report.
Marc von Grundherr, director of Benham and Reeves, says: “There’s no denying that London is having a more challenging year than many other parts of the country and affordability is at the heart of it.
“However, I wouldn’t characterise the London market as being in any sort of serious decline. The difficulty arises where asking-price expectations remain anchored to a market that no longer exists, and that is particularly evident within parts of the flat market where buyers are also scrutinising service charges, lease terms and the wider cost of ownership far more closely than they perhaps did previously.”
