July sees sharpest property price drop in over 20 years

UK property prices have seen their biggest July drop in more than two decades, according to Rightmove’s latest House Price Index.

According to the property portal, the average price of property coming to the market for sale dropped by 1.2% (-£4,531) in July to £373,709.

The firm claims during the summer months more sellers are pricing more competitively to attract buyer interest.

Buyers continue to show interest

Rightmove’s House Price Index reveals London is the biggest regional driver of new seller asking price falls this month (-1.5%), led by Inner London (-2.1%).

The property portal says the continued decade-high level of housing supply for sale is limiting price growth, compounded by the start of the traditional summer holiday season.

Rightmove also reveals buyers continue to show interest, with the number of sales being agreed 5% higher than at this time last year.

The number of potential future buyers contacting estate agents about homes for sale is 6% higher than last year.

Price is key to selling

Colleen Babcock, property expert at Rightmove, explains the housing market is shifting.

She 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 over-priced 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.”

Possible interest rate cuts

The report also reveals that Rightmove now expects the average asking price for a home to rise by 2% in 2025, down from the original forecast of 4%.

However, they say rumoured bank interest rate cuts could help stimulate the housing market.

Ms Babcock adds: “It’s been a promising first half of the year for activity levels, particularly when you consider that some will have brought their plans forward to try to avoid added stamp duty from April.

“Even after the stamp duty deadline, we’re seeing more sales being agreed and more new potential buyers entering the market than at the same time last year. Still, the knock-on effect of high buyer choice is slower price growth, so we’re revising down our prediction of how much the asking price of a home will increase over the whole of the year.

“Looking ahead to the second half of 2025, there will still very likely be the usual quieter seasonal periods around the summer holidays and Christmas, but we expect market activity to continue to be resilient. Crucially, buyer affordability is heading in the right direction, and another two Bank Rate cuts before 2026 would be a big boost to this.”