House prices fall as political uncertainty hits buyers

Sellers cut their asking house prices by an average of £3,832 in July as political uncertainty, higher mortgage costs and an unusually distracting summer weighed on England’s housing market, Rightmove reveals.

The 1% monthly drop took the average price of a newly listed home to £372,359.

July usually brings a seasonal decline, but the latest drop was five times the 10-year average of 0.2%.

Buyers still have plenty to choose from as the number of homes available for sale is 1% below the level recorded a year ago, but remains close to a 12-year high for the time of year.

Bigger price drop than normal

The platform’s property expert, Colleen Babcock, said: “This month’s larger-than-normal price fall reflects the reality of a market where buyers have plenty of choice and sellers are having to work harder to stand out and attract them.

“They’re also competing with an unusual number of distractions which have been keeping the minds of some potential buyers occupied, namely the World Cup and the hot weather.”

She added: “Pricing remains critical, and it’s remarkable that nearly three-quarters of homes that have sold so far this year have done so without needing an asking price reduction.

“A new Prime Minister also presents an opportunity to make housing a renewed priority, with action needed to support affordability, mobility and the delivery of more homes.”

Lower housing market activity

Rightmove points to the World Cup, summer holidays and prolonged hot weather as having contributed to reduced housing market activity.

Buyer demand temporarily fell by 8% during the first heatwave in May, before recovering, while June’s hotter spell produced a 6% decline.

A further 4% dip was recorded during the current July heatwave.

Activity had started the year on a stronger footing, but the unexpected war in Iran brought further uncertainty and pushed mortgage rates higher.

House sales agreed

The number of sales agreed during the first six months of 2026 was 6% lower than in the same period last year.

It was, however, level with the first half of 2024.

Rightmove said buyers were continuing to proceed where a home met their needs and was priced appropriately.

Nearly three-quarters of homes sold and completed so far this year did not need an asking price reduction.

House price right

Properties that were reduced in price took an average of 127 days to find a buyer, compared with 36 days for homes sold without a reduction.

The figures place greater pressure on sellers to set a competitive asking price when a property first comes to market, rather than starting high and looking at reducing.

Mortgage costs have also affected affordability, and the average two-year fixed rate now stands at 4.92%, up from 4.25% in February, before the war in Iran began.

Rates have eased slightly from an average of 5.07% last month, while lenders continue to compete for borrowers.

Rightmove also pointed to wages rising faster than house prices and unemployment remaining low.

Property sector reaction to the Rightmove House Price Index

Nathan Emerson, the CEO of Propertymark, said: “While the year initially started with optimism in the housing market, global unease has in many ways dominated the agenda ever since.

“Rightly so, many consumers have been exercising greater caution with their spending to help ensure household budgets are better protected against unforeseen increases in expenditure.

“In recent months, we have witnessed mortgage borrowing dip significantly, alongside a lower volume of new mortgage approvals.

“All eyes will be firmly focused on the Bank of England at the end of the month as it makes its next decision on the base rate, something that will very much set the tone, especially for those considering their next house move or who have tracker mortgage products.”