UK house prices have fallen by nearly £6,000 this month – the 18th consecutive August to have seen new seller asking prices fall.
New sellers listed their homes for £367,785 on average, down by £5,708 (1.5 per cent), according to Rightmove’s House Price Index.
Property experts have named this slow period as August’s traditional summer slowdown, as the school holidays tend to mean buyers with children especially put their home-moving plans on hold to enjoy holidays or time with family.
This also means that new sellers who do come to market at this quieter time of year may have a pressing need to sell, meaning they are likely to price more competitively.
However, the property website said that summer sellers this year may find that there is a degree of “buyer buzz” around the market that was missing in the peak-mortgage-rate market at this time last year.
Elsewhere, the first Bank of England base rate cut for four years at the start of the month has helped to accelerate mortgage rate drops and contributed significantly to improved buyer demand, the Housing Index showed.
Tim Bannister, Rightmove’s Director of Property Science, said: “The first Bank Rate cut since 2020 has sparked a welcome late summer boost in buyer activity.
“While mortgage rates aren’t yet substantially lower since the rate cut, the fact that the long-hoped-for first cut has finally arrived, and mortgage rates are heading downwards, is positive for home-mover sentiment. As the summer holiday season comes to an end, the conditions are there for a more active autumn market.”
In response to the Bank’s rate cut, Rightmove raised its 2024 forecast from a 1 per cent drop over the whole of the year to a 1 per cent rise in new seller asking prices.
Mr Bannister added: “This is a relatively small revision from our original prediction of a 1 per cent fall in prices over the year, since we didn’t initially forecast anything more drastic than a slight drop in prices this year.”
Since the Bank cut rates on August 1, the number of potential buyers contacting estate agents to view homes for sale is 19 per cent higher than in the same period a year ago. This comparison is with a very subdued period in 2023, when the market was dealing with the fallout of unexpectedly high inflation figures and peak mortgage interest rates.
However, this improvement in the buyer demand trend from +11 per cent across the month of July shows the immediate and strong impact of the first Bank rate cut since 2020.
Agents reported that increased political certainty and the improving economic outlook is also helping with buyer interest.
Rightmove said it expects small price rises in the Autumn, followed by the usual seasonal monthly falls in prices at the end of the year.
Gary Hamilton, founder of Bohome Estate Agents in Hamilton, said: “July was a strong month for us, reflecting the resilience of our market. We’ve seen a mix of outcomes, with some properties achieving well above the expected price whereas others sold closer to it.
“This underscores how crucial it is for sellers to set realistic and competitive prices in today’s market, as getting the price right is key to attracting strong buyer interest. With schools returning and routines normalising, we expect activity to pick up further in the coming weeks. The stability we’ve observed in July positions us well for continued growth into the Autumn.”
Gareth Overton, Head of Residential Sales at Henry Adams, commented: “The summer property market has remained fairly active, with increased stability providing a solid foundation for continued strong sales based on buyer confidence.
“The much-anticipated election outcome caused few ripples, with only a slight dip in viewings as the holiday season began. However, as the Autumn Budget approaches, we may see more significant changes, particularly among buy-to-let landlords who are closely monitoring potential capital gains tax implications.”
Mr Overton said that in areas such as Chichester, Midhurst and Bognor Regis, the current sales market is particularly active, and he said Henry Adams has seen a noticeable increase in enquiries from downsizers across the board.