The average price tag on a home coming to market fell by more than £4,500 this month, the biggest July price drop recorded in at least two decades, according to a property website.
Across Britain, the average asking price in July is £373,709, marking a £4,531 or 1.2% decrease month-on-month, Rightmove said.
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 Rightmove over more than 20 years of data, the website said.
Rightmove has also cut its house price forecast for 2025 from 4% growth to 2%.
A high level of seller competition is limiting price growth, it said.
But it is retaining its prediction of 1.15 million transactions this year.
London, and particularly inner London, has been a driver of asking price falls among new sellers, Rightmove said.
Price tags across London have fallen by 1.5% month-on-month, rising to 2.1% average price falls in inner London.
April’s increase in stamp duty has had a particular impact in London where property prices are higher, the website added.
By contrast, the north east of England has seen a 1.2% increase in prices month-on-month, continuing a trend of less expensive areas seeing faster price growth, Rightmove said.
Summer sellers typically need to work harder to capture distracted buyers’ attention.
Tempting pricing from new sellers is helping to improve buyer affordability, enticing new buyers into making inquiries, the report said.
It added that with mortgage rates falling and two more Bank of England base rate cuts still expected in 2025, the overall outlook for the second half of the year remains positive.
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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 4.53%, compared with 5.34% 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% to 1.0% 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% 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.”
