UK house prices drop by £4,969 as savvy sellers come to market with 'competitive' pricing

UK house prices dropped by an average of £4,969 this month as sellers adopt more competitive pricing strategies this summer. According to Rightmove's latest house price index, asking prices for new listings fell to £368,740 on average in August, aligning with the typical 10-year trend after unusually steep price drops in June and July.

This summer, prices dipped by over £10,000 (-£10,777), reflecting sellers' efforts to stand out and attract buyers during a traditionally quieter period due to holiday distractions. Property expert Colleen Babcock from Rightmove said: "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.

"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 reopened after the first pandemic lockdown, and generous stamp duty reductions had just been announced.

However, Ms Babcock warned: "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.

Ms Babcock said, "We expect this good buyer activity to help support prices in the next few months."

According to Rightmove's data, the average time to find a buyer was 62 days. The high number of homes for sale allowed buyers to make their choice and negotiate.

However, if a home was priced right from the outset and didn't require an asking price reduction, the average time to find a buyer was 32 days. If a home needed a reduction in asking price, this more than tripled to 99 days.

The Bank of England's welcome third interest rate cut of 2025 is likely to boost market confidence over the remaining months of the year.

Rightmove's daily mortgage tracker showed 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.

Matt Smith, mortgages expert at Rightmove, said: "The markets are currently forecasting one more [base rate] 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."

Steve Beercock, executive director at Beercocks in Yorkshire and The Humber, said: "August has started with some real momentum. We have already seen a surge of sales agreed in just the first week, which is a very positive sign. Getting the price right from the outset in the current market is crucial to minimise the risk of needing to cut the price later.

"Looking ahead, I expect September to be very strong. The recent drop in the Bank of England base rate is already stimulating activity.

"Mortgage colleagues have seen a marked increase in buyer enquiries in the past couple of weeks, and we are seeing exactly the same in our estate agency. With that combination of lower borrowing costs and motivated sellers who are pricing sensibly, the autumn market is shaping up to be busy and competitive."

Amy Reynolds, head of sales at Antony Roberts in Richmond, London, said: "July and August have both been busier than expected in Richmond, with strong agreed sales and very few fall-throughs.

"What's surprised me most is the first-time buyer flat market in our area. It slowed after the stamp duty holiday ended, but has now rebounded strongly. That said, there are still some well-priced homes sitting unsold, often because buyers are holding back.

"Some buyers may be waiting to see if the price drops, but we'll soon be out of the traditionally quieter summer holiday period and heading into the busier autumn. Those who hold back may see the property they like snapped up by someone else, so it's always worth an enquiry to gauge the seller's position."