"Sales activity remains stable, but it's a very price-sensitive market with buyers looking out for the right property at the right price. "
- Colleen Babcock - Rightmove
The average asking price for newly listed homes has fallen by 0.6% (£2,113) this month to £376,191, the biggest June drop in 14 years, as sellers compete to attract buyers over the summer.
Prices are now 0.5% below where they stood a year ago. While June typically brings modest price increases, averaging 0.1% over the past decade, this month's fall suggests many sellers are adjusting their expectations in response to high competition and more price-sensitive buyers.
Summer tends to be slower than spring, with buyers distracted by sporting events, holidays and better weather, meaning sellers often need to offer a more attractive price to stand out.
However, the national trend doesn't tell the whole story, as regional and local markets vary considerably depending on affordability pressures. Asking prices have fallen across all southern England regions and in Wales, while more affordable areas such as the north east and Scotland are holding up better compared with this time last year.
The number of homes for sale remains unusually high for this time of year, and that level of competition is contributing to the price falls as sellers compete for attention. In a market where choice is high and buyers can afford to be selective, getting the price right from the outset matters more than ever, with over a third of new listings failing to sell.
"It's unusual to see a price fall of this size in June, as we would normally expect to see modest price growth at this point in the year," said Colleen Babcock, property expert at Rightmove.
"What's different this time is a combination of factors, including wider economic uncertainty, the timing of the May bank holiday and unusual heatwave, and the high number of homes on the market, which together appear to be bringing forward the traditionally slower summer market."
She added that sellers need to work harder to attract attention in the current climate. "Setting a competitive asking price from the outset is key, as buyers are taking more time to compare options and are quick to move on if a home doesn't stand out on value," she said.
"When sellers are over-optimistic on price and find they need to reduce later to sell, it can be harder to regain momentum, which underlines just how important it is to get the pricing right from day one."
Sales activity holds steady despite slower start to summer
May's unusual heatwave brought the summer market forward earlier than usual this year, and the World Cup may prove to be a further distraction for home-movers over the coming months. Wider economic uncertainty also continues to weigh on the market.
Buyer demand across May was down 10% year-on-year, although this remains broadly in line with the pattern seen so far this year. Higher mortgage rates continue to squeeze many household budgets, while the wider choice of homes for sale is giving buyers less reason to rush unless a property stands out on price or presentation.
The number of newly listed homes is down 5% compared with this time last year, a further sign that the market is settling into its typical seasonal rhythm slightly earlier than usual. That said, listings remain higher than in recent years, up 6% on 2024 and 12% on 2023:
- Sales agreed are down 6% year-on-year
- Activity remains broadly in line with recent years
- Levels are virtually the same as 2024 and around 5% above 2023
Mortgage rates edge down slightly
Mortgage affordability has improved a little this month. Rightmove's daily mortgage tracker shows the average two-year fixed rate has fallen to 5.07% from 5.18% last month, cutting the average monthly mortgage payment by around £30.
"While the summer market has come a bit early this year, overall activity is still within a typical historic range," Babcock said.
"What has changed is some buyer behaviour, with more homes to choose from and higher borrowing costs, buyers are deliberating more and taking longer over their decisions. Sales activity remains stable, but it's a very price-sensitive market with buyers looking out for the right property at the right price.
"It's encouraging to see another slight reduction in average mortgage rates this month, which is a small step in the right direction for affordability and market sentiment. While rates remain elevated, even modest changes can make a difference to buyers' budgets and confidence."
Matt Smith, Rightmove's mortgage expert, said it was encouraging to see rates edging down. "It's encouraging to see mortgage rates edging down slightly, and even relatively small reductions can make a difference to buyers' budgets," he said.
"While rates remain higher than the lows of recent years, they have been relatively stable over a sustained period, which is helping to provide more certainty for those planning a move. There is still some underlying volatility in the economic and global market, which means rates could move slightly in either direction from here.
"However, the key takeaway for buyers is that we're currently in a period of greater stability than we've seen previously, and that stability can help support confidence, particularly for those who are close to affordability limits and weighing up their next step."
Marc von Grundherr, director of Benham and Reeves in London, said buyers are taking their time. "Buyers aren't moving at the pace we've seen in previous years, largely because current market conditions and an oversupply of stock are affording them the luxury of both time and choice," he commented.
He noted that the unusually large dip in asking prices reflects a shift in seller attitudes. "A larger than usual dip in asking prices also suggests that sellers are finally accepting this reality and pricing to sell, rather than pricing according to their own expectations," he said.
"So, whilst a quick sale is certainly still achievable, sellers shouldn't be disheartened if they don't find a buyer immediately. Today's market rewards patience, pragmatism and proper pricing, and those sellers who embrace these realities are the ones most likely to achieve a successful outcome."
