A dramatic 1% slump in average asking prices for newly-listed homes across the UK has left buyers reeling, with July's £3,832 drop marking a more significant downturn than the typical seasonal pattern. The steepest falls were seen in 'second stepper' homes, which declined by 0.9%, while 'top of the ladder' and first-time buyer properties saw drops of 0.5% and 0.6% respectively.
Rightmove blames a toxic mix of increased mortgage rates – partly influenced by the ongoing Iran conflict – domestic political uncertainty, and persistent heatwaves for the market shift. Analysis suggests that heatwaves in May, June, and July led to temporary dips in buyer demand, with the latest July heatwave contributing a 4% reduction. Sales agreed in the first half of 2026 were 6% lower than the same period in 2025, although they matched levels from the first half of 2024. Meanwhile, available housing stock remains close to a 12-year high for this time of year.
Colleen Babcock, Rightmove's property expert, warns that sellers must work harder to attract buyers in today's market, where buyers have ample choice. Research shows increased price sensitivity among buyers, with three-quarters of completed sales this year not involving a price reduction. Properties requiring cuts spent an average of 127 days on the market – significantly longer than those selling at their original asking price.
First-time buyers continue to face significant affordability concerns despite recent expansions in high loan-to-value mortgage products. Nathan Emerson, Chief Executive of Propertymark, notes a dip in mortgage borrowing and new mortgage approvals. Existing homeowners, particularly 'second steppers', are navigating a market where competitive pricing is crucial. Landlords may find reduced asking prices a mixed blessing – potentially making new acquisitions slightly more affordable but also impacting the perceived value of their existing portfolios.
Industry experts are calling for policy intervention to stabilise the market. Tomer Aboody, founding director of MT Finance, suggests that stamp duty reductions could stimulate transactions and provide a boost to the broader economy. Jeremy Leaf, a north London estate agent, echoes concerns, attributing uncertainty to domestic political upheaval and its potential impact on taxes, as well as the broader implications of the Iran conflict on interest rates and the cost of living.