British homeowners trying to sell their properties are facing a ‘reality check’, experts warned today after the biggest July drop in asking prices for at least two decades.
The average price tag on a home coming to market fell to £373,709 this month – marking a £4,531 or 1.2 per cent decrease on June, according to Rightmove.
While there is often a seasonal dip in prices in July, this is the largest monthly price drop at this time of year recorded by the firm over more than 20 years of data.
Rightmove has also cut its house price forecast for 2025 from 4 per cent growth to 2 per cent amid concerns over a high level of seller competition limiting price growth, although the company is retaining its prediction of 1.15million transactions this year.
London, and particularly inner London, has been a driver of asking price falls among new sellers, according to the firm. Price tags across London have fallen by 1.5 per cent month-on-month, rising to 2.1 per cent average price falls in inner London.
April’s increase in stamp duty has had a particular impact in London where property prices are higher. But property experts believe the market is undergoing a reset rather than collapsing, with over-optimistic sellers now correcting ambitious sale prices.
Ranald Mitchell, director at Charwin Mortgages, said: ‘This is not a crash, it’s a reality check. Sellers can no longer name their price and expect the market to play along.’
Buyers in Hampshire could look at this two-bedroom thatched country house in Martin. The New Forest property was listed for £549,000 in March, but has now been cut to £495,000
In Kent, this three-bedroom semi-detached house in Kemsing was put on the market for £740,000 last October. But the price was cut to £725,000 in February and £695,000 in June
Among the homes reduced in London is a freehold split-level two-bedroom flat for sale in Richmond. The property was first listed in September 2024 for £1.4million, before being reduced to £1.35million in November, £1.285million in January and £1.2million in May
This two-bedroom detached bungalow for sale on a cul-de-sac in the village of Walton near Felixstowe in Suffolk was listed for £300,000 in April, but has now been cut to £280,000
He added: ‘With stock levels surging and buyers laser-focused on value, overpriced homes are being left to gather dust. The drop in asking prices is proof that wishful thinking is being replaced by market sense.Â
‘Savvy sellers who price sharply are seeing results. Rightmove’s trimmed forecast makes sense in a market that is adjusting, not collapsing.’
Ranald Mitchell, director at Charwin Mortgages: ‘This is not a crash, it’s a reality check. Sellers can no longer name their price and expect the market to play along. With stock levels surging and buyers laser-focused on value, overpriced homes are being left to gather dust. The drop in asking prices is proof that wishful thinking is being replaced by market sense. Savvy sellers who price sharply are seeing results. Rightmove’s trimmed forecast makes sense in a market that is adjusting, not collapsing’
Justin Moy, managing director at EHF Mortgages: ‘This has all the hallmarks of seasonal demand combined with the fall-out from April’s increased stamp duty costs. With mortgage rates holding and lenders digging deeper into their pockets this could just be a summer blip, but the government needs to keep a close eye on this trend.’
Katy Eatenton, mortgage and protection specialist at Lifetime Wealth Management: ‘Increased stock levels are giving sellers a reality check and they’re pricing more realistically. People have come to understand that over-pricing can see you under-achieve when it comes to the sale price agreed. This is not a sign of a property market imploding, just one that is becoming more rooted in reality.’Â
Babek Ismayil, Founder at OneDome: ‘Sellers are waking up to the fact that, if you put your property on the market at an unrealistic price, it’s simply not going to sell in the current market. And if it doesn’t sell and languishes on portals, that can become a problem and see the achievable price dwindle further. This has been the case for a few years now but there now appears to be a shift, which may get the market moving in earnest finally.’
Patricia McGirr, founder at Repossession Rescue Network: ‘Yes, asking prices are sliding, but where I am, it’s a tale of two markets. Family homes with decent space are holding strong. But in the investment world? Buyers are driving hard bargains and sellers are blinking first. Tempting price tags might boost affordability, but they’re also a litmus test: if your property’s not shifting, it’s probably overpriced, overlooked or overhyped. The second half of 2025 may look rosier, but right now, the smart money’s negotiating hard and getting what it wants.’
By contrast, the North East of England has seen a 1.2 per cent rise in prices month-on-month, continuing a trend of less expensive areas seeing faster price growth.
Summer sellers typically need to work harder to capture distracted buyers’ attention.
Justin Moy, managing director of EHF Mortgages, said: ‘This has all the hallmarks of seasonal demand combined with the fall-out from April’s increased stamp duty costs.
‘With mortgage rates holding and lenders digging deeper into their pockets this could just be a summer blip, but the Government needs to keep a close eye on this trend.’
Babek Ismayil, founder at property transaction platform OneDome, added: ‘Sellers are waking up to the fact that, if you put your property on the market at an unrealistic price, it’s simply not going to sell in the current market.
‘And if it doesn’t sell and languishes on portals, that can become a problem and see the achievable price dwindle further. This has been the case for a few years now but there now appears to be a shift, which may get the market moving in earnest finally.’
Among the homes reduced in London is a freehold split-level two-bedroom flat for sale in Richmond which was put on the market in 2024 for the first time in 60 years.
The property was first listed last September for £1.4million, before being reduced to £1.35million in November, £1.285million in January and £1.2million in May.
In Kent, a three-bedroom semi-detached house in Kemsing was put on the market for £740,000 last October, but cut to £725,000 in February and £695,000 in June.
And buyers in Hampshire could look at a two-bedroom thatched country house in Martin. The New Forest property was listed for £549,000 in March, but has now been cut to £495,000.
Katy Eatenton, mortgage and protection specialist at Lifetime Wealth Management, said: ‘Increased stock levels are giving sellers a reality check and they’re pricing more realistically.
‘People have come to understand that over-pricing can see you under-achieve when it comes to the sale price agreed. This is not a sign of a property market imploding, just one that is becoming more rooted in reality.’
Tempting pricing from new sellers is said to be helping to improve buyer affordability, enticing new buyers into making inquiries.
With mortgage rates falling and two more Bank of England base rate cuts still expected in 2025, Rightmove believes the overall outlook for the second half of the year remains positive.
Patricia McGirr, founder of the Repossession Rescue Network, said: ‘Yes, asking prices are sliding, but where I am, it’s a tale of two markets.
‘Family homes with decent space are holding strong. But in the investment world? Buyers are driving hard bargains and sellers are blinking first.
‘Tempting price tags might boost affordability, but they’re also a litmus test: if your property’s not shifting, it’s probably overpriced, overlooked or overhyped.
‘The second half of 2025 may look rosier, but right now, the smart money’s negotiating hard and getting what it wants.’
Many lenders have recently made changes to their criteria, allowing some borrowers to potentially take out bigger loans.
Rightmove’s mortgage tracker indicates that the average two-year fixed mortgage rate is now 4.53 per cent, compared with 5.34 per cent a year earlier.
Colleen Babcock, a property expert at Rightmove, said: ‘We’re seeing an interesting dynamic between pricing and activity levels right now.
‘The healthy and improving level of property sales being agreed shows us that there are motivated buyers out there who are willing to finalise a deal for the right property.
‘What’s most important to remember in this market is that the price is key to selling.
‘The decade-high level of buyer choice means that discerning buyers can quickly spot when a home looks overpriced compared to the many others that may be available in their area.
‘It appears that more new sellers are conscious of this and are responding to this high-supply market with stand-out pricing to entice buyers and get their home sold.’
Ms Babcock added: ‘Crucially, buyer affordability is heading in the right direction, and another two (Bank of England base rate) cuts before 2026 would be a big boost to this.’
Phillip Bishop, managing director at Perry Bishop in Cirencester, Gloucestershire, said: ‘We’re seeing significantly higher stock levels than a year ago but mitigated in part by a good increase in buyer registrations and viewing levels compared with last year.
‘Buyers are taking their time and viewing more before deciding, and the serious and motivated sellers are pricing sensibly and getting success.’
He added: ‘Rarely available properties are still receiving mass interest and multiple offers.
‘The Cotswolds summer market can slow over the holidays, but we expect a second wave of serious buyer activity in the autumn, with serious motivated buyers wanting to agree their purchase.’
Rightmove’s report was released as property firm Hamptons downgraded its 2025 rental growth forecast from 4.5 per cent to 1.0 per cent across Britain. It said this reflected a faster-than-expected market slowdown.
It said the primary driver behind this cooling rental market has been the transfer of demand from the rental sector to the sales market.
As mortgage rates have fallen, homeownership has become more accessible, leading to strong first-time buyer activity, Hamptons said.
Hamptons said that rents on newly let properties rose by 0.4 per cent year-on-year across Britain in June, reaching £1,369 per month – the weakest growth since August 2020.
Aneisha Beveridge, head of research at Hamptons, said: ‘The rental market has softened more quickly than we anticipated towards the end of last year.
‘What initially appeared to be a London-centric slowdown has now spread across the country, with rents declining in multiple regions and growth easing elsewhere.
‘A combination of falling mortgage rates and a weaker labour market has shifted the dynamics – more affluent renters are becoming first-time buyers, while the economic slowdown is limiting what others can afford.
‘That said, this isn’t the end of the rental growth story.’
She said that a shortage of rental homes ‘remains unresolved’ and regulatory changes are likely to add to landlords’ costs, constraining supply.
Hamptons’ lettings index uses data from the Connells Group to track changes to the cost of renting. It is based on achieved rather than advertised rents.
Nathan Emerson, chief executive of property professionals body Propertymark, said: ‘We have seen encouraging signs from (Chancellor) Rachel Reeves’s Leeds Reforms which are designed to potentially better help lenders serve those on lower incomes.
‘However, such reforms alone will not help keep house prices manageable without the UK Government and the devolved administrations meeting their individual housing targets to keep pace with real world demand.’
